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Handbook for Preparing a Resettlement Action Plan

INTERNATIONAL FINANCE CORPORATIONA Member of the World Bank Group

Environment and Social Development DepartmentPromoting Sustainable Private Sector Investment

The International Finance Corporation (IFC), the World Bank Group’s private sector investment arm, seeks to fur-ther economic growth by promoting sustainable private sector development in developing member countries. Sinceits founding in 1956, IFC has committed more than $31 billion of its own funds and arranged $20 billion in syndi-cations for 2,636 companies in 140 developing countries. IFC’s committed portfolio at the end of FY01 was $14.3billion. IFC’s contibution to development goes beyond the provision of capital as IFC frequently advises its clientsand member governments on issues relating to environmental and social sustainability. IFC strives to be transparentand accountable in its operations and seeks input from a broad set of stakeholders, with special attention paid toproject-affected communities.

IFC has significant in-house environmental and social project appraisal capacity and also provides training to pri-vate sector financial institutions on environmental and social appraisal of investment projects. IFC’s environmental,social and disclosure requirements have been developed through a process of extensive peer review and draw onbest practice experience from a broad range of industries and disciplines. Using its own and concessional funding,from sources such as the Global Environment Facility, IFC also invests in projects with specific environmental goals—supporting projects related to renewable energy, cleaner production and the provision of potable water, forinstance. For more information on IFC and its work to promote sustainability in private sector activities, please visitwww.ifc.org/enviro.

IFC Handbook for Preparing a Resettlement Action Plan i

ContentsForeword iii Policy and Principles v Acknowledgments vii Glossary of Terms ix Introduction 1 Section I—Scope of Application 5

Types of Resettlement 6 Public Disclosure Requirements 7 Special Considerations 8

Section II—Components of a Resettlement Action Plan 11 Identification of Project Impacts and Affected Population 12

Step 1: Mapping 13 Step 2: Census 15 Step 3: Inventory of Affected Assets 17 Step 4: Socioeconomic Studies 20 Step 5: Analysis of Surveys and Studies 23 Step 6: Consultation with Affected People Concerning

Assistance Benefits and Development Opportunities 23 Legal Framework 26 Compensation Framework 28

Compensation 28 Eligibility for Assistance 32 Responsibility and Schedule for Compensation Payments 33

Resettlement Assistance and Livelihood 34 Selection and Preparation of the Resettlement Site 36 Influx Management 36 Relocation Schedule and Assistance 37 Replacement of Services and Enterprises 38 Livelihood Restoration 38 Treatment of Cultural Property 39 Special Assistance for Women and Vulnerable Groups 39

Budget and Implementation Schedule 41 Organizational Responsibilities 42 Consultation and Participation 45

Information Exchange 45 Promoting Participation 46

Grievance Redress 48 Monitoring and Evaluation 49

Performance Monitoring 50 Impact Monitoring 51 Completion Audit 52

Section III—Implementation Checklist 55 Section IV—Outline of a Resettlement Action Plan 59 Additional Resources 65 Annexes 66

A. IFC Operational Directive OD 4.30 on Involuntary Resettlement 67B. Sample Terms of Reference (TOR) for a Resettlement Action Plan 76C. Sample Budget for a Resettlement Action Plan 78

ii IFC Handbook for Preparing a Resettlement Action Plan

Tables Table 1: Illustrative Census Format 17Table 2: Land Assets Inventory 19 Table 3: Physical Assets Survey (sample) 20 Table 4: Income Stream Analysis (sample) 22 Table 5: Legislation Relevant to Resettlement for an

Infrastructure Project in China (sample) 27 Table 6: Database Format for Assessing and Processing Compensation

Claims (sample) 30 Table 7: Entitlement Matrix (sample) 34 Table 8: Options for Physical Resettlement 37 Table 9: Sample RAP Implementation Schedule 42 Table 10: Consultation Log (sample) 47 Table 11: Grievance Redress Framework (sample) 49 Table 12: RAP Monitoring Plan (sample) 50 Table 13: RAP Monitoring Framework 51 Table 14: Matrix of Selected Impact Indicators (sample) 53 Table 15: Stages in Resettlement Action Planning and Implementation 56

FiguresFigure 1: Aerial Photographs Documenting Pre-Project Land

Occupancy and Use (sample) 14 Figure 2: Income Stream Analysis (sample) 22 Figure 3: Example of a Sustainable Development Project Serving

People Associated with Mining Project 25 Figure 4: Illustration of Compensation Strategies for Linear

Resettlement Associated with a Highway Project 29Figure 5: Organizational Framework for Resettlement Management (sample) 43 Figure 6: Roles and Scope of a Resettlement Unit (sample) 44

IFC Handbook for Preparing a Resettlement Action Plan iii

Foreword

Involuntary resettlement may entail both the physical displacement of peopleand the disruption of their livelihoods. Social Development Specialists at theInternational Finance Corporation (IFC) work closely with project developerswho sometimes bear the heavy responsibility of managing involuntary reset-tlement in order to implement their projects in developing countries. MostIFC projects do not involve resettlement, but in spite of our efforts to avoid orminimize physical or economic displacement of people, some projects do.Our Social Development Specialists assist all project stakeholders inapproaching resettlement as an opportunity for promoting sustainable devel-opment through improvements to the economic and social well-being ofaffected people.

The role of the Social Development Specialists at IFC continues to evolve. At the fore-front is their core function of quality assurance, and provision of specialist advice to thedevelopers of projects financed by IFC. This assurance function ensures consistent andpragmatic application of the World Bank Group policies and guidelines while the over-all interaction between specialists and project developers contributes towards the miti-gation of environmental and social risks. At the same time, the accumulated experienceof our Specialists constitutes a unique resource for us to share with those who tackle thedifficult developmental challenges along with us.

IFC's Social Development Specialists serve as a resource to the project developers forthe design of resettlement action plans that comply with the World Bank Group's poli-cy on involuntary resettlement. In turn, our Social Development Specialists have gainedspecific insight to countries and industry sectors that have proved to be of value to manycompanies, financial institutions and community based groups struggling with the chal-lenging task of managing resettlement. This Handbook provides guidance based on ouraccumulated experience to date.

In order to maximize our learning and knowledge sharing, we recently established theBest Practices Group with a mandate to collect and disseminate international best prac-tices. Our objective is to apply the learning from these best practice examples to helpthe private sector progress from a traditional impact-mitigation approach to one that isdriven by opportunities for positive and sustainable development impact. In the contextof resettlement, this means working with the project developers to find better and morecreative ways of providing displaced populations with access to the wide range of eco-nomic opportunities that development creates. With this goal in mind, the SocialDevelopment Specialists set out to systematically record their collective resettlementexperience and insights under the sponsorship of the Best Practices Group.

Our intent in producing this Handbook was to document the essential steps for bestpractice in designing and implementing resettlement action plans. However, we recog-nize that best practices evolve rapidly through application and those who experiencephysical or economic displacement have distinct perspectives that may not always beunderstood by practitioners. In order to reflect evolving best practices, innovative tech-

iv IFC Handbook for Preparing a Resettlement Action Plan

niques and new insights of practitioners, as well as the views of resettled people them-selves, this Handbook will be treated as a dynamic document and will undergo period-ic updates. Your views and comments on this Handbook will help us learn and improve.Through continuous learning and sharing our experience, we hope to contribute furtherto IFC’s mission of promoting sustainable private sector investment.

Gavin MurrayDirectorEnvironment and Social Development Department

IFC Handbook for Preparing a Resettlement Action Plan v

Policy and Principles

The International Finance Corporation (IFC) is the private sector developmentarm of the World Bank Group. This handbook has been prepared by IFC’sEnvironment and Social Development Department, which is responsible forensuring that IFC-financed projects conform to World Bank Group environ-mental and social safeguard policies.

The purpose of this handbook is to provide guidance in the planning and exe-cution of involuntary resettlement associated with IFC investment projects.IFC’s policy on involuntary resettlement applies to any project that may resultin the loss of assets, the impairment of livelihood, or the physical relocation of an indi-vidual, household, or community. The audience for this handbook includes: IFC clients;host government agencies that support private investment in development projects; non-governmental organizations; and the people whose lives and livelihoods will be affect-ed by projects financed by IFC.

All IFC investments involving involuntary resettlement are currently processed with ref-erence to the World Bank’s Operational Directive 4.30, Involuntary Resettlement (OD4.30). This handbook explains how and under what circumstances OD 4.30 applies andwhat actions IFC expects project sponsors to take to manage involuntary resettlement.As such, the handbook provides an outline of the rights, roles, and responsibilities of allparties involved in involuntary resettlement. At the time of the publication of this hand-book, all the environmental and social policies applicable to IFC’s investments areundergoing review. This review will assess the need for revision of IFC policies based onexperience gained applying those policies since their initial formulation. However,regardless of the outcome of this review, IFC will continue to adhere to a number ofbasic principles for addressing the adverse effects of involuntary resettlement associatedwith its investment projects. These principles are:

■ Involuntary resettlement should be avoided.

■ Where involuntary resettlement is unavoidable, all people affected by it should be compensated fully and fairly for lost assets.

■ Involuntary resettlement should be conceived as an opportunity for improvingthe livelihoods of the affected people and undertaken accordingly.

■ All people affected by involuntary resettlement should be consulted andinvolved in resettlement planning to ensure that the mitigation of adverse effectsas well as the benefits of resettlement are appropriate and sustainable.

Given the diversity of IFC’s investments and the complexity of environments in whichthose investments take place, this handbook should be viewed as a guide to managinginvoluntary resettlement rather than a rulebook. Specific approaches to resettlementand restoration of livelihoods should be designed to meet the needs of the people affect-

vi IFC Handbook for Preparing a Resettlement Action Plan

ed by a project and the conditions under which those people live. Sponsors of projectsthat will result in involuntary resettlement should consult IFC’s specialists early in theproject cycle to ensure that they understand IFC’s requirements and take the necessarysteps to meet those requirements. IFC’s specialists, in turn, will advise project sponsorsthroughout the resettlement planning process to ensure that the process contributes toeffective preparation and implementation of projects.

This handbook is complemented by two other publications of the IFC Environment andSocial Development Department: Doing Better Business through Effective PublicConsultation and Disclosure: A Good Practice Manual, and Investing in People:Sustaining Communities through Improved Business Practice—A CommunityDevelopment Resource Guide for Companies. Together, these documents provide prac-tical guidance to IFC clients and project stakeholders in both mitigating the adverseeffects and promoting the sustainable benefits of those investments. IFC welcomes com-ments on this handbook from all readers.

IFC Handbook for Preparing a Resettlement Action Plan vii

Acknowledgments

The Handbook for Preparing a Resettlement Action Plan has been preparedby the Environment and Social Development Department (CES) of theInternational Finance Corporation. It was developed by an IFC team led byCES Social Development Specialists Richard English and Eric Brusberg underthe direction of Ron Anderson, IFC’s Chief Environmental Specialist.

The handbook represents the cumulative experience of IFC’s environmentaland social development specialists in applying the World Bank Group’s pol-icy on Involuntary Resettlement to IFC investments. Kerry Connor, DianaBaird, John Butler, Nick Flanders, Ted Pollett, Debra Sequeira, Jose Zevallos, and MotokoAizawa provided regular guidance and substantive input to the development of thishandbook. Thanks are also due to John Kittridge, Didier Fohlen, Tish Lowe, ToddHanson, Shawn Miller, and Glen Armstrong, who provided constructive comments onearlier drafts of the handbook.

A draft of the handbook was also circulated among staff members and consultants withinthe World Bank Group who are familiar with resettlement issues and the implementationof resettlement action plans. The authors would like to thank the following “practitioners,”who gave generously of their time to provide detailed and insightful comments: SusanJoyce, Robert Zwahlen, Tod Ragsdale, Michaela Bergman, Robert Barclay, John Renshaw,Phil Jones, Rita Dey, Dieter Heinsohn, and Justin Pooley. The authors also appreciatedcomments provided by interested parties during the 60-day web disclosure of the drafthandbook.

viii IFC Handbook for Preparing a Resettlement Action Plan

IFC Handbook for Preparing a Resettlement Action Plan ix

Glossary of Terms

Explanations of the following terms used in this handbook are intended asworking definitions. A number of the terms—and the conditions to whichthey refer—are defined more specifically in either the policy on involuntaryresettlement or the more general IFC policy on environmental assessment.The text of these and other IFC environmental and social safeguard policiescan be found on the IFC Internet web page, www.ifc.org, under the generalheading “Projects and Policies”.

Associated facility—Facilities that are essential to the construction or opera-tion of an IFC-financed project but are not themselves financed by IFC. TheIFC policy on involuntary resettlement may apply to resettlement induced bysuch facilities.

Compensation—Payment in cash or in kind for an asset or a resource that isacquired or affected by a project at the time the asset needs to be replaced.

Cut-off date—Date of completion of the census and assets inventory of per-sons affected by the project. Persons occupying the project area after the cut-off date are not eligible for compensation and/or resettlement assistance.Similarly, fixed assets (such as built structures, crops, fruit trees, and wood-lots) established after the date of completion of the assets inventory, or analternative mutually agreed on date, will not be compensated.

Host population—People living in or around areas to which people physically displacedby a project will be resettled who, in turn, may be affected by the resettlement.

Economic displacement—Loss of income streams or means of livelihood resulting fromland acquisition or obstructed access to resources (land, water, or forest) resulting fromthe construction or operation of a project or its associated facilities.

Involuntary resettlement—Resettlement is involuntary when it occurs without theinformed consent of the displaced persons or if they give their consent without havingthe power to refuse resettlement.

Land expropriation—Process whereby a public authority, usually in return for compen-sation, requires a person, household, or community to relinquish rights to land that itoccupies or otherwise uses

OD 4.30—The World Bank Group Operational Directive on Involuntary Resettlement.OD 4.30 embodies the basic principles and procedures that underlie IFC’s approach toinvoluntary resettlement associated with its investment projects.

Project-affected household—All members of a household, whether related or not, oper-ating as a single economic unit, who are affected by a project.

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Project-affected person—Any person who, as a result of the implementation of a proj-ect, loses the right to own, use, or otherwise benefit from a built structure, land (resi-dential, agricultural, or pasture), annual or perennial crops and trees, or any other fixedor moveable asset, either in full or in part, permanently or temporarily.

Project sponsor—A corporate entity seeking IFC financing for a project either directly orthrough a financial intermediary supported by IFC.

Physical displacement—Loss of shelter and assets resulting from the acquisition of landassociated with a project that requires the affected person(s) to move to another loca-tion.

Replacement cost—The rate of compensation for lost assets must be calculated at fullreplacement cost, that is, the market value of the assets plus transaction costs. Withregard to land and structures, IFC defines “replacement costs” as follows:

■ agricultural land—the market value of land of equal productive use or potential located in the vicinity of the affected land, plus the cost of preparation to levelssimilar to or better than those of the affected land, plus the cost of any registra-tion and transfer taxes;

■ land in urban areas—the market value of land of equal size and use, with simi-lar or improved public infrastructure facilities and services preferably located inthe vicinity of the affected land, plus the cost of any registration and transfertaxes;

■ household and public structures—the cost of purchasing or building a newstructure, with an area and quality similar to or better than those of the affectedstructure, or of repairing a partially affected structure, including labor and con-tractors’ fees and any registration and transfer taxes.

In determining the replacement cost, depreciation of the asset and the value of salvagematerials are not taken into account, nor is the value of benefits to be derived from theproject deducted from the valuation of an affected asset.

Resettlement Action Plan (RAP)—The document in which a project sponsor or otherresponsible entity specifies the procedures that it will follow and the actions that it willtake to mitigate adverse effects, compensate losses, and provide development benefits topersons and communities affected by an investment project.

Resettlement assistance—Support provided to people who are physically displaced bya project. Assistance may include transportation, food, shelter, and social services thatare provided to affected people during their relocation. Assistance may also include cashallowances that compensate affected people for the inconvenience associated withresettlement and defray the expenses of a transition to a new locale, such as movingexpenses and lost work days.

IFC Handbook for Preparing a Resettlement Action Plan xi

Resettlement policy framework—A resettlement policy framework is required for proj-ects with subprojects or multiple components that cannot be identified before projectapproval. This instrument may also be appropriate where there are valid reasons fordelaying the implementation of the resettlement, provided that the implementing partyprovides an appropriate and concrete commitment for its future implementation. Thepolicy framework should be consistent with the principles and objectives of OD 4.30.

Stakeholders—Any and all individuals, groups, organizations, and institutions interestedin and potentially affected by a project or having the ability to influence a project.

Vulnerable groups—People who by virtue of gender, ethnicity, age, physical or mentaldisability, economic disadvantage, or social status may be more adversely affected byresettlement than others and who may be limited in their ability to claim or take advan-tage of resettlement assistance and related development benefits.

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Introduction

IFC Handbook for Preparing a Resettlement Action Plan 1

Introduction

As the member the World Bank Group that promotes private investmentthroughout the developing world, the International Finance Corporation(IFC) is committed to financing environmentally and socially sound projectsthat improve the lives of people in its member countries. As part of IFC’s over-all environmental and social review procedures, its specialists appraise pro-posed projects for their potential positive development effects and to ensurethat adverse effects are properly mitigated.

A project that involves involuntary resettlement—the economic and/or physical dis-placement of people—represents a significant challenge for IFC. Without proper plan-ning and management, involuntary resettlement may result in long-term hardship foraffected people and environmental damage to the locations in which they are resettled.Such potentially negative consequences diminish the developmental impact of the proj-ect, tarnish the reputation of the project sponsor, and are contrary to IFC’s mission toimprove the lives of people through private sector investment. Conversely, through prop-er resettlement planning, a sponsor can enhance the development impact of a projectand thereby improve the living standards of affected people. Investment in local eco-nomic and social development pays dividends to the sponsor in the form of enhancedgood will within the host community, an enhanced national and international corporatereputation, and a well-founded partnership with IFC for future investment opportunities.

It is the responsibility of a project sponsor to provide IFC with accurate informationregarding the potential social effects of the project as early in the project developmentcycle as possible. IFC, in turn, considers this information in evaluating and approving theproject. IFC recognizes that host governments will often take responsibility for the reset-tlement of affected peoples, which may make the sponsor’s role in the process difficultto define. Nevertheless, regardless of which entity takes responsibility for resettlement,IFC requires the outcome of that resettlement to be consistent with the involuntary reset-tlement policy.

IFC urges sponsors to avoid involuntary resettlement wherever feasible or to minimize itby exploring alternative project designs and sites. Where involuntary resettlement isunavoidable, IFC sponsors must engage affected people in the planning, implementa-tion, and monitoring of the resettlement process. IFC encourages project sponsors toplan and execute involuntary resettlement as a development initiative to ensure that thelivelihoods and living standards of affected people prevailing before their displacementare improved.

A Resettlement Action Plan (RAP) is a document drafted by the sponsor or other partiesresponsible for resettlement (such as government agencies), specifying the procedures itwill follow and the actions it will take to properly resettle and compensate affected peo-ple and communities. The RAP is the sponsor’s commitment to IFC and to the affectedpeople that it will meet its obligations arising from involuntary resettlement.

Proper resettlement planning can enhance

the development impactof a project.

IFC urges sponsors toavoid involuntary

resettlement whereverfeasible or to minimize

it by exploring alternative project

design or siting.

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The RAP must identify the full range of people affected by the project and justify theirdisplacement after consideration of alternatives that would minimize or avoid dis-placement. The RAP outlines eligibility criteria for affected parties, establishes rates ofcompensation for lost assets, and describes levels of assistance for relocation and recon-struction of affected households. The RAP’s planning protects the sponsor against unan-ticipated or exaggerated claims from individuals who have spurious eligibility for reset-tlement benefits. The mediation of such claims can cause significant delays in projectimplementation, which can result in cost overruns for the sponsor.

The purpose of this handbook is to provide guidance to project sponsors in complyingwith World Bank Group’s policy on Involuntary Resettlement (OD 4.30, attached asannex A) and in the preparation of a RAP. This handbook represents the “good practice”that has emerged from the application of the policy across the IFC portfolio by IFC’ssocial development specialists. The handbook is organized into four sections with sup-porting annexes.

■ Part I outlines the scope of OD 4.30’s application and identifies situations that require specific and detailed consultation between project sponsors and IFC’s social development specialists.

■ Part II describes fundamental principles, procedures, and requirements of RAPpreparation and provides examples of survey instruments and summary datatables. These examples illustrate both the logic and the approach of RAP prepa-ration as well as output from data collection that is needed for RAP planning.

■ Part III is a checklist that identifies the sequence of actions that IFC’s specialistsfollow in reviewing the preparation, implementation, and evaluation of a RAP.

■ Part IV provides a detailed outline of a RAP that can be adapted to meet therequirements of specific projects.

The annexes of this handbook contain a copy of OD 4.30, a sample terms of referencefor the preparation of a RAP, and a sample RAP budget.

This handbook has been prepared as a guide to addressing larger-scale economic andphysical displacement. As such, it describes a level of planning and implementation thatmay apply to only a small percentage of IFC investment projects. Although the level ofplanning and the difficulty of implementation may vary based on the number of peopleresettled or the size of the land area acquired, the approach outlined in this guide willapply in all cases of resettlement, large or small.

A well-executed RAP protects the sponsoragainst unanticipated orexaggerated claims fromindividuals who havespurious eligibility forresettlement benefits.


IScope of

Application


I Scope of Application

IFC urges sponsors of investment projects to avoid the disturbance and dis-placement of human populations. Where such disturbance is unavoidable, theproject sponsor should minimize adverse effects on people and on the envi-ronment through judicious routing or siting of project facilities. The aim of theinvoluntary resettlement policy is to ensure that people who are physically oreconomically displaced as a result of a project end up no worse off—andpreferably, better off—than they were before the project was undertaken.

Resettlement is involuntary when it occurs without the informed consent of the dis-placed persons or, if they give their consent, without having the power to refuse reset-tlement. A typical example of such displacement is a government agency’s expropriationof land for a capital development project by eminent domain. People occupying or oth-erwise dependent on that land for their livelihoods may be offered fair compensation fortheir losses. However, they have little recourse to oppose the government’s expropriationregardless of their desire to continue occupying or using the affected land.

Displacement may be either physical or economic. Physical displacement is the actualphysical relocation of people resulting in a loss of shelter, productive assets or access toproductive assets (such as land, water, and forests). Economic displacement results froman action that interrupts or eliminates people’s access to productive assets without phys-ically relocating the people themselves. IFC’s policy applies in either situation.

While land acquisition does not necessarily require the displacement of people occu-pying or using the land, it may have an effect on the living standards of people whodepend on resources located in, on, or around that land. For example, a farming familymay lose a portion of its land to a project without having to vacate its homestead.Nevertheless, the loss of even a portion of its land may reduce the overall productivityof that farm. This threat is magnified among agrarian populations of developing coun-tries where farm fields are typically small and often widely scattered. Alternatively, landacquisition may restrict a community’s access to commonly held resources such asrangeland and pasture, non-timber forest resources (such as medicinal plants or con-struction and craft materials), woodlots for timber and fuelwood, or fishing grounds.

Similarly, the acquisition of water resources by a project may entail neither land acqui-sition nor physical relocation but may nonetheless have negative effects on the liveli-hoods of people living in the project area. For example, the diversion or impoundmentof a river’s flow for the generation of hydroelectric power may affect the livelihoods ofdownstream farmers who rely on minimum flows for irrigating crops. A coastal powerplant or factory using ocean water for cooling purposes may affect fish habitats, therebyaffecting the livelihoods of people who fish the coastal waters.

The involuntary resettlement policy applies under all conditions of potential physical oreconomic displacement resulting from the acquisition or use of land for a projectregardless of the total number of people affected or the significance/severity of antic-ipated impact. The following paragraphs outline both general and specific conditionsunder which IFC’s policy applies.

Land acquisition maynot require the physical

relocation of people, butit may affect the

livelihoods of peoplewho live, work, or

otherwise depend on theland acquired.


Types of Resettlement

As noted above, the Involuntary Resettlement policy applies to a wide vari-ety of project effects, and the scale of displacement associated with thoseeffects will vary from project to project. Common types of resettlement andthe issues associated with them include:

Rural resettlement—Displacement of people in rural areas typically resultsfrom a project’s acquisition of farm land, pasture, or grazing land or theobstruction of access to natural resources on which affected populations relyfor livelihoods (for example, forest products, wildlife, and fisheries). Majorchallenges associated with rural resettlement include: requirements for

restoring income based on land or resources; and the need to avoid compromising thesocial and cultural continuity of affected communities, including those host communi-ties to which displaced populations may be resettled.

Urban resettlement—Resettlement in urban or periurban settings typically results in bothphysical and economic displacement affecting housing, employment, and enterprises. Amajor challenge associated with urban resettlement involves restoration of wage-based orenterprise-based livelihoods that are often tied to location (such as proximity to jobs, cus-tomers, and markets). Resettlement sites should be selected to maintain the proximity ofaffected people to established sources of employment and income and to maintain neigh-borhood networks. In some cases, the mobility of urban populations and the consequentweakening of social safety nets that are characteristic of rural communities require thatresettlement planners be especially attentive to the needs of vulnerable groups.

Linear resettlement—Linear resettlement describes projects having linear patterns ofland acquisition (highways, railways, canals, and power transmission lines). In sparselypopulated rural areas, a linear project such as an electric transmission line may haveminimal impact on any single landholder. Compensation is characterized by a largenumber of small payments for the temporary loss of assets such as standing crops. If welldesigned, linear projects can easily avoid or minimize the demolition of permanentstructures. Conversely, in a densely populated urban area, a linear project such as a roadupgrading may require the demolition of structures along the project right-of-way, there-by significantly affecting large numbers of people. Linear resettlement contrasts with site-specific resettlement because of the problems that frequently arise when resettlementactions have to be coordinated across multiple administrative jurisdictions and/or differ-ent cultural and linguistic areas.

Site-specific Resettlement—Site-specific resettlement is associated with discrete, non-linear projects such as factories, ports, highway interchanges, hotels, commercial plan-tations, etc., where land acquisition encompasses a fixed area. However, site-specificresettlement associated with mining and other extractive industries such as oil and gasmay require progressive land acquisition over long periods. As a result, displacement ofcommunities may occur in phases over a number of years, even decades. Communitiesthreatened with displacement at some future date often prefer to remain in place untilresettlement is absolutely necessary. The major challenge in such incremental resettle-


ment is maintaining a consistent approach to compensation and incomerestoration over the life of the project. Similarly, the creation of reservoirs forhydropower and irrigation projects can result in significant economic and phys-ical displacement of rural communities. In the event that it considered invest-ment in a project with such potentially large and controversial effects, IFCwould require that project to support development initiatives to reestablish theaffected people in significantly improved social and economic conditions.

Public Disclosure Requirements

To comply with IFC’s policies on environmental assessment of projects anddisclosure of information, all sponsors of projects resulting in involuntaryresettlement are required to prepare and publicly disclose a RAP. The RAP must be pre-pared through a process of public consultation with all interested and affected parties.Before engaging in this process of consultation, IFC recommends that sponsors consultits publication Doing Better Business through Effective Consultation and Disclosure: AGood Practice Manual. As this document emphasizes, proper consultation with affectedparties can increase the effectiveness and reduce the costs of RAP implementation forthe sponsor or other responsible parties.

Sponsors must provide copies of the RAP—along with all other documents related to aproject’s environmental assessment—to IFC for submission to the World Bank InfoShopfor public access at least 60 days before IFC’s formal consideration of the project forfinancing. In addition to complying with any host country disclosure requirements, thesponsor must ensure that the RAP is available throughout the project area. To this end,the sponsor may be required to prepare summaries of the RAP in local languages for dis-tribution to accessible points within the project area. The 60-day disclosure period willallow time for all interested and affected parties to submit their comments and concernsabout the RAP.

Under certain circumstances, based entirely on the judgment of IFC specialists, a RAPmay warrant a shorter period of public review. Under these circumstances, sponsors willbe required to publicly disclose the RAP 30 days before IFC’s formal consideration ofproject financing. In all cases, sponsors will be made aware of the necessary period forpublic disclosure early in the RAP preparation process.

More detailed information on public disclosure requirements is contained in IFC’sOperational Policy 4.01 on Environmental Assessment and its policy on the disclosureof information. These and other relevant safeguard policies, as well as the above-men-tioned good practice manual for consultation are on IFC’s Internet site, www.ifc.org.

. . . proper consultationwith affected parties

can increase the effectiveness and reduce

the costs of RAP implementation for the

sponsor or other responsible parties.


Special Considerations

In addition to the general conditions of land acquisition and displacementnoted above, specific situations may trigger the invocation of IFC’s involun-tary resettlement policy. Alternatively, IFC may require the sponsor to demon-strate that the policy does not apply. These special cases include:

■ Willing buyer/willing seller—Individuals affected by a project may be will-ing to sell their property and assets on a voluntary basis to the project spon-sor. Under such circumstances—the transfer of unencumbered rights to awilling buyer by a willing seller—IFC will not invoke its involuntary resettle-ment policy provided the sponsor can demonstrate that: 1) land markets or

other opportunities for the productive investment of the sales income exist; 2)the transaction took place with the seller’s informed consent; and 3) the sellerwas provided with fair compensation based on prevailing market values. In theabsence of land markets, the sponsor should establish a compensation structurethat enables sellers of land and assets to restore their livelihoods to levels equiv-alent to or better than those maintained at the time of sale.

■ Associated facilities—The involuntary resettlement policy also applies to allcomponents of a project resulting in physical or economic displacement regard-less of the source of financing. In other words, the policy applies to a project’sassociated facilities, which, in the judgment of IFC, are: 1) a consequence of theIFC-financed project and therefore would not take place in the absence of theproject; 2) necessary to achieve its objectives as set forth in the project docu-ments; and 3) carried out, or planned to be carried out, contemporaneously withthe project. Examples of associated facilities include oil, gas and water pipelines,canals, electrical transmission lines evacuating power from a thermal orhydropower plant, pipelines, and construction access roads. IFC will determineon a case-by-case basis whether the involuntary resettlement policy applies to aproject’s associated facilities and, if so, how to ensure that resettlement andcompensation are accomplished in a manner consistent with the policy.

■ Prior acquisition—Under certain circumstances, a project sponsor may be pro-vided with an unoccupied project site clear of any current claims by a govern-ment agency or other party. If resettlement from the project site has occurred—with or without the project sponsor’s knowledge—in anticipation of the projectbut not immediately preceding project implementation, IFC may invoke theinvoluntary resettlement policy to determine whether those resettled were com-pensated in a manner consistent with its policy requirements. Under such cir-cumstances, IFC considers factors such as: 1) the length of the intervening peri-od between land acquisition and project implementation; 2) the processes, laws,and actions by which the resettlement was carried out; 3) the number of peopleaffected and the significance of the impact of the land acquisition; 4) the rela-tionship between the party that initiated the land acquisition and the projectsponsor; and 5) the current status and location of the people affected.

IFC policy applies tofacilities that serve theneeds of a project evenif those facilities are notfinanced by IFC.


■ Timing of the resettlement—IFC policy requires that land acquisition, paymentof compensation for affected assets, and resettlement associated with a project(or project component) be complete before the onset of project impacts.However, a given project may have subprojects or multiple components thatcannot be identified before project approval or that may be implementedsequentially over an extended period (such as a highway project in which thelocation of all interchanges has not been determined or a mining project forwhich all land acquisition cannot be planned at one time). Under these circum-stances, OD 4.30 provides for the preparation of a resettlement policy frame-work to establish the principles, procedures, and organizational arrangementsby which the sponsor will abide during project implementation. The sponsor willthen prepare a RAP consistent with the policy framework for each subsequentsubproject or project component that entails physical and/or economic dis-placement. A policy framework is appropriate when there are valid reasons fordelaying or sequencing the implementation of the resettlement—as when a com-munity, which may be affected by the planned expansion of a project (a miningproject, for instance) some years hence, prefers not to be moved until thatexpansion is imminent.

The following sections of this manual provide detailed guidance on the preparation andimplementation of a RAP that meets IFC’s requirements for positive and sustainabledevelopmental impact.

IFC requires that landacquisition, payment of

compensation for affected assets, and

resettlement take placebefore the onset of

project impacts.


IIComponents of a Resettlement

Action Plan


II Components of a Resettlement Action Plan

IFC requires a resettlement action plan (RAP) for any project that results ineither the physical or the economic displacement of people. The scope andlevel of detail of resettlement planning will vary with circumstances, depend-ing on the project’s complexity and the magnitude of its effects. As a mini-mum requirement, a RAP must ensure that the livelihoods of people affectedby the project are restored to levels prevailing before inception of the proj-ect. However, simple restoration of livelihood may be insufficient to protectaffected populations from adverse project impacts, especially induced effectssuch as competition for resources and employment, inflation, and the break-down of social support networks. For this reason, IFC seeks to promote theimprovement of the living standards of people affected by the project. Thus, resettlementactivities should result in measurable improvements in the economic conditions andsocial well-being of affected people and communities.

This section describes a recommended approach to effective RAP preparation.The essen-tial components of a RAP are the following:

■ identification of project impacts and affected populations;■ a legal framework for land acquisition and compensation;■ a compensation framework;■ a description of resettlement assistance and restoration of livelihood activities;■ a detailed budget;■ an implementation schedule;■ a description of organizational responsibilities;■ a framework for public consultation, participation, and development planning;■ a description of provisions for redress of grievances; and■ a framework for monitoring, evaluation, and reporting.

The basic principles, procedures, and requirements of RAP preparation are described atlength below. Throughout the text, examples of survey instruments and summary datatables are provided. These examples illustrate both the logic and the approach of RAPpreparation as well as the types of data that are needed for RAP planning. They are notmeant to serve as templates for data collection and analysis. Instead, they are intended toillustrate the depth and breadth of information required for effective resettlement planning.

Resettlement and development planning require specialized expertise. It is essential thatthe project sponsor engage the services of qualified and experienced personnel to designand implement resettlement action plans. (A sample terms of reference for such servicesis provided in annex B). However, it is equally important that sponsors engage themselvesin the RAP design process. Sponsor participation in the process is instrumental to coordi-nating resettlement activities with the project implementation schedule. IFC experienceindicates that the success of a RAP is related directly to the level of sponsor involvementin its implementation. Because the scope and level of detail of resettlement planning will

IFC will require a projectsponsor to prepare a

RAP for any project thatresults in the physical or

economic displacementof people.

The success of a RAP isdirectly related to the

level of sponsor involvement in its

implementation.


vary, not all RAPs require the same level of expertise. Sponsors should consultIFC specialists early in the process to determine the appropriate levels of tech-nical assistance needed to design and implement a RAP.

Identification of Project Impacts and Affected Populations

The first task in planning resettlement is to identify a project’s adverse impactsand the populations that will be affected. As noted above, this usuallyrequires the participation of qualified experts who have appropriate trainingand experience. Resettlement planning involves more than simple cadastralsurveys or inventories of affected assets. The ultimate goal of a RAP is toenable those displaced by a project to improve their standard of living—a

goal that requires an examination of social, environmental, and economic conditionsbeyond simple physical inventories.

The RAP must identify all people affected by the project and all adverse impacts on theirlivelihoods associated with the project’s land acquisition. Typical effects include breakupof communities and social support networks; loss of dwellings, farm buildings, and otherstructures (wells, boreholes, irrigation works, and fencing), agricultural land, trees, andstanding crops; impeded or lost access to community resources such as water sources,pasture, forest and woodland, medicinal plants, game animals, or fisheries; loss of busi-ness; loss of access to public infrastructure or services; and reduced income resultingfrom these losses.

Consultation with officials of local government, community leaders, and other repre-sentatives of the affected population is essential to gaining a comprehensive under-standing of the types and degrees of adverse project effects. The project sponsor mustdiscuss plans for a census and registration program with local leaders and representa-tives of community-based organizations. Census and asset inventory enumerators maybe the first project-related personnel that affected people will encounter. Enumeratorsmust be thoroughly briefed on the objectives and timetable of the project and what isbeing planned in terms of physical relocation, compensation for lost assets, and restora-tion of livelihood.

Sponsors of projects resulting in the physical relocation of affected populations to a newsite must also undertake an environmental and social assessment of the resettlement site.People inhabiting the areas in which project-affected populations are resettled areknown as “host populations” or “host communities.” Host communities may be affect-ed adversely by new settlement and should therefore be identified as a category of per-sons affected by the project. The sponsor must address and mitigate any adverse effectsassociated with resettlement in host communities including increased pressure on land,water, natural vegetation (forests, woodlands, savannas, grasslands, and wetlands), plan-tations and woodlots, or other common property resources, public infrastructure, andservices. Host communities should be informed and consulted as part of the resettlementplanning process. Consultation involving representatives of both host communities andthe communities to be displaced helps to build familiarity and to resolve disputes that

The RAP must identifyall people affected bythe project and alladverse impacts on theirlivelihoods associatedwith the project’s landacquisition.

The sponsor must mitigate any adverseimpacts on the hostcommunity that areassociated with resettlement.


inevitably arise during and after resettlement. Any payment due to host communities forland or other assets that will be provided to new settlers should be agreed on and ren-dered promptly.

Affected populations and impacts should be identified through a series of steps :

1. thematic maps that identify such features as population settlements, infrastruc-ture, soil composition, natural vegetation areas, water resources, and land usepatterns;

2. a census that enumerates the affected people and registers them according tolocation;

3. an inventory of lost and affected assets at the household, enterprise, and com-munity level;

4. socioeconomic surveys and studies of all affected people (including seasonal,migrant, and host populations), as necessary;

5. analysis of surveys and studies to establish compensation parameters, to designappropriate income restoration and sustainable development initiatives, and toidentify baseline monitoring indicators; and

6. consultation with affected populations regarding mitigation of effects anddevelopment opportunities.

Each of these steps is described in detail in the following paragraphs. As the descriptionwill indicate, these steps are not necessarily discrete or sequential.

Step 1: Mapping—The area from which people will be moved as well as the area towhich people will be resettled should be mapped in detail. The sponsor should preparea detailed large-scale map (if possible, supported with aerial photography) on whichindividual affected households are demarcated (identified with registration numbersderived from the population census described below). The sponsor should undertakeland surveys and map different types of land according to use and potential (for instance,crop suitability assessments, natural vegetation, and livestock carrying capacity assess-ments). From these survey maps, resettlement planners can prepare various thematicmaps that identify the location and extent of important types of land use. Additionalthematic maps should be prepared that identify: land use categories; the location ofcommon property resources; cultural property (for example, places of ritual significance,graveyards, and monuments); road and transportation networks; and the location ofemployment and services.

In addition to its usefulness for planning, mapping of the project area, affected house-holds, natural resources, fixed assets, and infrastructure provides the sponsor with a spa-tial reference or baseline with which to protect the project from claims by people whomove into the affected area after the cut-off date (see figure 1).

Host communities should be informed andconsulted as part of the

resettlement planningprocess.

Thorough mapping canprotect the sponsor from

spurious compensationclaims.


Figure 1: Aerial Photographs Documenting Pre-Project Land Occupancy and Use (Sample)


Step 2: Census—The census of people affected by the project is a key initialstage in the preparation of the RAP. The census serves five important andinterrelated functions:

■ enumerating and collecting basic information on the affected population;

■ registering the affected population by residence or locality;

■ establishing a list of legitimate beneficiaries before the project’sonset that counters spurious claims from those moving into the proj-ect area solely in anticipation of benefits;

■ laying a framework for subsequent socioeconomic research neededto establish fair compensation rates and to design, monitor, and evaluate sus-tainable income restoration or development interventions; and

■ providing a baseline for monitoring and evaluation.

Enumeration and Registration—Census and registration provide information on thescale and complexity of the required resettlement planning (for example, the size, dis-tribution, and socioeconomic diversity of the population). The census must encompassall people adversely affected by the project, regardless of their legal status—landowner,holder of land rights, tenant, illegal squatter—or whether they are actually living on anaffected site at the time of the census. In other words, lack of legal land title does notdisqualify people from resettlement assistance. Private landowners and holders of rightsto land as well as any person currently occupying public or private land for shelter, busi-ness purposes, or other sources of livelihood (caretakers, squatters, scavengers) shouldbe included in the census. While landless people or squatters may not be eligible forland compensation, they may be eligible for resettlement assistance, compensation forassets (such as shelters and standing crops, orchards, or woodlots), and, where practica-ble, the benefits of development interventions, which may include provision of land.

Resettlement planners must give particular attention to vulnerable groups living in theproject area. These groups may include households headed by women or children, peo-ple with disabilities, the extremely poor, the elderly, and groups that suffer social andeconomic discrimination, including indigenous peoples and minorities. Members of vul-nerable groups may require special or supplementary resettlement assistance becausethey are less able to cope with the physical and/or economic displacement than theaffected population in general. An indigenous population, for example, may have moredifficulty than other affected people with physical displacement because of a strongerattachment to the land, the natural resources, or the physical features of a site requiredby a project. Project sponsors should consult World Bank Group Operational DirectiveOD 4.20, on Indigenous Peoples.

Similarly, resettlement planners must account for people who may not occupy a siterequired by a project at the time of enumeration. Refugees or people internally displacedby civil conflict may be unable or unwilling to return to a location to exercise their land

Lack of legal title toland does not

disqualify people from resettlement assistance.


claims after a conflict. In Mozambique, for example, proponents of an industrial estateprovided resettlement assistance to farmers who had fled the project area during yearsof civil war. Though these farmers were absent from the land at the time of the census,they were included among the affected population and compensated on their return. Insuch instances, systems for checking and validating land claims are essential to com-prehensive resettlement planning.

Beneficiary Capping—The completion of the census represents a provisional cut-off datefor eligibility for resettlement assistance. This makes it essential that planners ensure suf-ficient public awareness of the cut-off date. Census-takers should provide affected peo-ple documentation that confirms their enumeration (identity cards or a witnessed copyof the survey endorsed by the household head). Proof of enumeration precludes aninflux of people into the project area after the cut-off date. Although concessions shouldbe made for enumerator errors and omissions, as a rule people moving into the projectarea after the cut-off date should not be entitled to assistance. Planners must never-theless accommodate individuals or groups who are not present at the time of registra-tion but who have a legitimate claim to membership in the affected community. Suchgroups might include absent family members engaged in migrant wage labor or nomadicpastoralists who use local resources on a seasonal basis. If there is a significant time lagbetween the completion of the census and implementation of the RAP, resettlementplanners should make provision for population movements as well as natural populationincrease and expansion of households, which may include a repeat census.

Framework for Socioeconomic Studies—The project area census can be combined withthe gathering of pertinent demographic (age, sex, family size, births, and deaths) andrelated social and economic information (ethnicity, health, education, occupation,income sources) from among the affected people. This information can provide resettle-ment planners with a general understanding of the communities affected by the project,including host communities, and the scope of compensation and resettlement assistancenecessary to mitigate adverse effects. From this general understanding, resettlementplanners can develop more targeted socioeconomic studies (for example, studies of landand resource management practices, analyses of specific income streams, assessment ofgender roles and vulnerable groups) to improve the RAP’s compensation and livelihoodrestoration strategies.

Baseline Data for Monitoring and Evaluation—The census should provide resettlementplanners with the quantitative data that enables them to budget resources and services,to track the delivery of those resources and services to the affected population, and tocorrect problems in the delivery of resources and services throughout implementation ofthe RAP. In addition, information gathered during the census can yield important base-line data at the household and community levels, which can be used to establish indi-cators not only for resettlement implementation, but also for monitoring and evaluationof income restoration and sustainable development initiatives associated with a RAP.

Resettlement planners should consolidate data gathering efforts both to economize onproject resources and to minimize survey fatigue among the affected population. Table1 illustrates a census survey instrument, which, in a single format registers and locatesthe household (according to map coordinates); identifies all family members by age, sex,

The completion of thecensus represents a provisional cut-off datefor resettlement assistance.


ethnic group, relationship to the head of the household, education, and occupation;indicates the prevalence of health problems (based on a previous two-weeks recall); andidentifies nonresident members and sources of remittance income. This information pro-vides a number of baseline indicators, including mortality and fertility; children inschool by age and sex; household size; incidence of disease; and key economic activi-ties of household members. Data must be collected for all household members, includ-ing those who may not be resident at the time of the census. In some cases, remittancesfrom family members living outside a household can account for a significant propor-tion of total income for that household.

In summary, the census consolidates information that 1) provides initial information onthe scale of resettlement to be undertaken; 2) gives an indication of further socioeco-nomic research needed to quantify losses to be compensated and, if required, to designappropriate development interventions; and 3) establishes indicators that can be meas-ured at a later date during monitoring and evaluation.

Step 3: Inventory of Affected Assets—The sponsor must undertake a detailed survey ofall losses that will result for each household, enterprise, or community affected by theproject. The survey should account for land acquisition and loss of physical assets aswell as loss of income—either temporary or permanent—resulting from displacement ofhousehold members from employment or income-generating resources (for instance,potters from clay deposits, fishers from fishing grounds, small-scale suppliers or vendors

Table 1: Illustrative Census Format

Data gathering shouldbe consolidated to

economize on projectresources and to

minimize survey fatigueamong affected

populations.

An inventory of lossesaccounts for the loss ofphysical assets as well

as the loss of income—either temporary or

permanent.


from customers). Assets held collectively, such as water sources, livestock grazing areas,irrigation systems, and community structures should be recorded separately. It is essentialfor resettlement planners to consult with affected people during this step to develop areasonable consensus on the methods and formulas for assigning value to lost assetsand income forgone during resettlement. In some jurisdictions, it may be necessary forlocal authorities to validate claims to assets. However inventories of assets are compiled,heads of households should be required to countersign them to minimize the possibili-ty of subsequent claims or disputes regarding claims. The following are important inven-tory categories:

■ Land use/land capability—All land acquired or otherwise affected by the proj-ect, whether on a permanent or a temporary basis, must be surveyed, classifiedby type, and recorded. Civil authorities typically classify and assess the value ofland by use (for instance, irrigated agriculture, nonirrigated agriculture, pasture,forest, housing, commercial). However, such classification may overlook the dif-ference between present and potential land use requirements of affected people.For example, swidden cultivators practice crop rotation over wide areas andlong periods of time. In such a case, land that appears unused may in fact be ina fallow cycle awaiting cultivation some years hence. Resettlement plannersmust establish the difference between present and potential land use to ensurethat replacement land provided to affected people is of value equivalent to theland acquired from them. Such a differentiation typically requires detailed soilsmaps and an assessment of land capability and carrying capacity. In addition,even in cases where cadastral survey maps demarcating land ownership andclassification are available from the local land revenue office, these maps maybe dated and no longer accurate. For this reason, the sponsor should be pre-pared to undertake independent surveys of land use and assessments of capaci-ty to ensure the accuracy and equitable payment of compensation claims.

Additional follow-up studies are usually required to support estimates of theannual revenue derived from different land uses or land types such as irrigatedland, rain-fed land, fish-farming ponds, and woodlots. Table 2 is a generic exam-ple of a productive assets survey summary that includes: land areas by type anduse, annual net income per hectare (Net$/yr/ha), income lost for the household(% taken and Value/lost production ($), replacement value on the prevailingmarket, and tenure status.

■ Houses and associated structures—Dwellings, separate kitchens, toilets, store-rooms, barns, stables, livestock pens, granaries, and workshops for cottageindustry should be classified by construction materials (timber, wattle, bamboo,reed, brick and mortar, concrete, earth). All structures should be included in theinventory regardless of whether they are permanently inhabited or occupiedintermittently by transient populations.

■ Other private physical assets—Including nonmoveable assets such as standingcrops, fruit and fodder trees, firewood and timber woodlots, plantations (rubber,oil palm) fencing, wells, irrigation structures, and graves or tombs.

The sponsor should beprepared to undertakeindependent land surveys to ensure boththe accuracy and theequitable payment ofcompensation claims.

■ Private enterprises—Shops, workshops, stalls, factories, and other businessestablishments should be surveyed and recorded. These should be classifiedaccording to ownership (private business, public enterprise, joint venture, etc.).Individuals losing their enterprises, employees losing jobs, or vendors losing cus-tomers should be enumerated, and the value of these losses incurred during theresettlement period should be estimated.

Table 3 is an example of a generic household physical assets inventory. At the commu-nity level, the assets survey should provide an inventory and an assessment of the loss-es of public resources including:

■ Common property resources—including forest and woodlands (sources ofbuilding and craft materials, biomass for domestic energy) and pasture.

■ Public structures—Including schools, clinics, meeting halls, places of worship,wells/communal water points, livestock watering points, bathing and washingplatforms, bus shelters, and monuments.

■ Cultural property—Cultural property includes archeological sites, burialgrounds, monuments, shrines, places of worship, artifacts, and sites of religiousor historical significance. Project sponsors should refer to the World Bank GroupOperational Policy OP 11.03 or later revisions for guidance on the managementof cultural property.


Table 2: Land Assets Inventory


■ Infrastructure—All infrastructure that will be destroyed or disrupted by theconstruction of the project should be enumerated, including roads and bridges;irrigation and drainage channels; water and sewage lines; power lines; and com-munication lines.

The inventory of assets should be cross-referenced with the census and linked with thecensus in a single database. It is advisable for resettlement planners to photograph, doc-ument, and register all assets described above by household, enterprise, or communityorganization. Digitized photographs can be used to record assets for storage in comput-erized census and socioeconomic databases.

Step 4: Socioeconomic Studies—A substantial amount of household-level socioeco-nomic data is collected during the census and inventories of assets. However, low-income households (those commonly affected by resettlement), particularly in ruralareas, typically have diversified livelihood strategies that combine agriculture with wagelabor and small-scale enterprise. Therefore, it is important to survey all income sourcesin order to calculate income loss from project land acquisition as a proportion of totalincome. For example, land loss for a household engaged in business or wage labor islikely to be less significant than for a household whose income is derived wholly fromagriculture. For these reasons, the socioeconomic studies are needed to collect addi-tional quantitative (supported by qualitative) information in two important areas: 1)household-level income streams and livelihood strategies that were not identified in thecensus and inventories of assets; and 2) the structure, organization, and economic inter-

Table 3: Physical Assets Survey (sample)


dependencies within the larger community affected by the project. Analysis of these datawill help identify those households most at risk from physical or economic displace-ment. However, income stream analysis is not required in cases where land acquisitiondoes not affect the income-earning capacity of a household (for example, in cases whereonly dwellings are displaced and the affected people can be relocated to near-by sites).

The socioeconomic studies should be linked closely with the census and inventory ofassets to provide comprehensive information on household economic resources, includ-ing common property resources. The census and inventory of assets should have alreadyidentified the basic social unit of production or economic organization. Typically, thisunit is the household, which functions as a single economic unit (a household may con-sist of a nuclear family, extended family, or a unit including non-related members). Ifincome streams are based exclusively on agriculture and associated activities, thesocioeconomic study can be largely completed by merging the census and assets data.The remaining tasks are to carry out additional studies to quantify net returns fromincome streams and to establish replacement values for land and assets. This informa-tion provides resettlement planners with an understanding of household income streamsand of how these streams can be restored after resettlement is complete. It also providesa baseline for evaluating the success of livelihood restoration and sustainable develop-ment measures. It is important to disaggregate production and income stream data bygender in order to differentiate the roles that men and women play in maintaining ahousehold’s livelihood and to design appropriate strategies to restore income.

Where other activities contribute to the household economy (such as seasonal wagelabor, remittances, or income earned by pastoralists herding livestock in areas distantfrom the community), the socioeconomic surveys should identify net returns from theseincome streams. For example, a study focused on income from seasonal employmentoutside the village may be needed to establish a value for net wages returned to thehousehold each time the census survey has identified a remitting or wage-earning mem-ber of the household. In many parts of the world, rural people may appear to be agri-culturalists. However, further analysis may reveal that the agricultural base is insufficientfor subsistence and represents only a small portion of household income, whereas thebulk of household income is derived from migratory wage labor or other sources. Figure2 and Table 4 (from which Figure 2 is derived) provide a generic example of incomestreams analysis for a hypothetical rural community.

Depending on the size of the affected population, it may be possible to conduct asocioeconomic survey of the entire population on a household-by-household basis.Where the population exceeds a size suitable for an individual household survey, a sur-vey of a sample of the population may suffice. However, resettlement planners must fol-low appropriate survey methodologies to ensure that a statistically valid representativesample of all strata of the affected population—including women and other vulnerablegroups—is included in the survey. It is important for survey designers to recognize thata given community may not be homogeneous. All groups within a community do nothave the same vulnerabilities or potential to respond to development opportunities asso-ciated with a RAP. The involvement of representatives of these groups in survey designand data gathering will improve the quality and comprehensiveness of the survey results.

Socioeconomic studiesshould be linked with

the census and inventoryof assets to provide

complete information onhousehold income

streams.

All groups within a community do not have

the same problems orpotential to respond to

opportunities associatedwith a RAP.


Commerce

and trade

21%

Remittances

6%

Seasonal labor

10%

Woodlots

5%

Livestock/

cattle

11%

Fishing

8%

Irrigated agriculture

20%

Rain-fed agriculture

19%

Table 4: Income Stream Analysis (sample)

Figure 2: Income Stream Analysis (sample)


Quantitative data gathering in resettlement situations can be problematic. Factors suchas the adequacy of sample frames, the experience of field staff, the knowledge and coop-eration of respondents, transportation and communications, and adequacy of field staffsupervision can bias sampling as well as data collection. Resettlement planners shouldbalance quantitative and qualitative methods of gathering data to ensure as complete anunderstanding of income streams as possible. Smaller-scale qualitative case studies mayyield data that are as useful as larger-scale quantitative sample surveys. Guidance on sur-vey planning and design can be found in the Additional Resources section at the end ofthis handbook.

Step 5: Analysis of Surveys and Studies—Analysis of the data collected in the census,assets inventory, and socioeconomic studies serves three ends: 1) it provides informationneeded to establish an entitlement matrix for household- and community-level com-pensation; 2) it yields basic economic and social information needed to design appro-priate livelihood restoration and development interventions; and 3) it provides quantifi-able demographic, economic, educational, occupational, and health indicators forfuture monitoring and evaluation of RAP implementation.

As table 4 and figure 2 illustrate, household data can be aggregated to compare thereturns to labor or investment in different income stream options (for instance, farming,livestock, or commerce). This information is essential to designing livelihood restorationmeasures for affected households and communities. Likewise, the assessment of lossesresulting from the effects of the project are better understood in the context of theoverall household and community economies. Household data can, in turn, be disag-gregated to identify economic strata within communities (the poorest and most vulnera-ble households, households dependent on remittances, etc.) and to identify appropriateassistance as well as development strategies for the populations affected by the project.

Socioeconomic studies also yield important information on the ways in which affectedcommunities are organized and function. These studies should provide resettlementplanners with an understanding of leadership and decision making processes within thecommunity that may function independently of the prevailing political and administra-tive structures. This understanding also helps resettlement planners to identify informalsocial support networks that are important for the survival of the community, particular-ly more vulnerable members of the community such as households headed by women,the impoverished, and groups that suffer social and economic discrimination.

Step 6: Consultation with Affected People Concerning Assistance Benefits andDevelopment Opportunities—With the information provided by the surveys and stud-ies, resettlement planners can engage in informed and constructive consultations withthe affected community regarding the RAP strategy for livelihood restoration. A commit-tee of community representatives can serve as a focal point for consultations on the typesof assistance proposed by resettlement planners as well as for subsequent participationof the community in RAP implementation. Where host communities are affected byresettlement decisions, representatives of these communities should be included in theseconsultations.

Smaller-scale qualitativestudies may yield data

that are as useful aslarger-scale quantitative

sample surveys.

Surveys and studies provide a basis for

informed consultationwith affected

communities about realistic livelihood

restoration and development strategies.


A project’s impact may extend beyond a discrete number of affected households to thewider community. In other words, a project may result in disruptions to the economicand social relations of a community that cannot simply be offset by measures that com-pensate and restore income to affected households. An example of such disruptionwould be the reduced viability of a farmer’s cooperative after some of its members werephysically relocated by a project, or small-scale enterprises’ losing customers for thesame reason. Under circumstances where a project has such cumulative impacts, IFCmay require project sponsors to support development interventions among the broaderproject-affected population to mitigate those effects. Such interventions should beappropriate and sustainable, that is, they should be based on existing local capacity,local resources, and local initiative, and they should enable the participants to movebeyond dependence on external resources (such as capital and expertise) within the lifeof the RAP implementation. The best approach to designing such development inter-ventions is direct consultation with the affected population.

It is beyond the scope of this document to prescribe the range of possible developmentinterventions. However, survey data will yield a substantial amount of information onthe economy and social organization of the affected community. Resettlement plannersshould review these data to identify appropriate and sustainable interventions. Theseinterventions may relate to productivity or production enhancements of existing incomestreams through the extension of existing irrigated agriculture, construction of storagefacilities, support for small-scale credit, and the formation of cooperatives and market-ing strategies or the promotion of new commodities and enterprises. Project employ-ment, during both the construction phase and the long-term operations phase, shouldalso be considered as part of the overall development package.

In addition to the restoration and improvement of livelihoods, resettlement may provideopportunities to an affected community to improve housing, public infrastructure, andservices and to engage in land use planning that contributes to the long-term develop-ment objectives of individuals and the community as a whole. For example, resettlementassociated with an infrastructure project in Côte d’Ivoire provided the affected popula-tion with the opportunity to move from substandard squatter housing to a planned andfully serviced site: permanent housing with water, sewerage, electricity, street lighting,and paved access. The resettlement site provided the affected population with improvedaccess to schools, health facilities, and employment opportunities.

Having identified such development opportunities, resettlement planners should designappropriate interventions in close collaboration with beneficiaries, local authorities,and, where appropriate, local community–based organizations. Proposed developmentinterventions will require documentation similar to resettlement plans: an implementa-tion schedule; clear and effective organizational responsibilities; a program for consul-tation and participation; a mechanism for dispute resolution and problem solving; adetailed budget; a schedule for monitoring and independent evaluation; and mecha-nisms for taking corrective actions identified in the evaluation.

In all its investments, IFC strives to maximize development benefits for affected people.In other words, IFC seeks to promote the economic, social, and environmental sustain-ability of its investments. Where a project has a finite life span (as, for example, the

Resettlement may provide opportunities toan affected communityto improve housing, public infrastructure,and services and toengage in land use planning that contributes to the long-term development objectives.

Figure 3: Example of a Sustainable Development Project Serving People Associated with Mining Project


development of a mine or of infrastructure such as a highway, port, or hydropower facil-ity), IFC encourages sponsors to identify measures that will support community devel-opment initiatives beyond the life of a project. IFC’s Community Development ResourceGuide for Companies provides strategies for mobilizing resources (such as establishinglinkages with NGOs or creating community development foundations) to support sus-tainable local-level development. Figure 3 illustrates a program of development initia-tives supported by a mining project through a community development foundation. Thefigure describes the goal of the foundation and its principal activities, describes how itproposes to meet the challenge of sustainable development, and gives an account ofactivities supported to date.

IFC encourages sponsorsto identify measures

that will support community development

initiatives beyond thelife of the project.


The RAP legal frameworkcompares local laws andregulations with IFC policy, identifies gapsbetween the two, anddescribes how thosegaps can be filled.

Legal Framework

The legal framework of a RAP describes all laws, decrees, policies and regu-lations relevant to the resettlement activities associated with a project. Manycountries have legislation and policies governing land expropriation andcompensation for affected assets. However, policy governing resettlement isoften poorly defined, if not altogether lacking. IFC requires the project spon-sor to identify, review, and abide by all laws of the host country that areapplicable to land acquisition and involuntary resettlement including:

■ the scope of the power of eminent domain and the nature of compensationassociated with it, both the procedures for assessing compensation values andthe schedule for making compensation payments;

■ the legal and administrative procedures applicable, including the appealsprocess and the normal time for such procedures;

■ land titling and registration procedures; and

■ laws and regulations relating to the agencies responsible for implementing reset-tlement and those related to land compensation, consolidation, land use, envi-ronment, water use, and social welfare.

This requirement also extends to established local customs and traditions that governaffected communities. All relevant laws and customs should be noted and summarizedin the RAP, as examplified in table 5.

Regardless of the existence of relevant formal or customary laws, IFC requires the spon-sor to ensure that the outcome of any involuntary resettlement associated with its proj-ect is consistent with IFC’s policy on involuntary resettlement as stated in OD 4.30 (seeannex A). In particular, this policy stipulates that people affected by the project must be:

■ consulted regarding resettlement activities;

■ provided with timely compensation for lost assets at full replacement cost;

■ provided with alternative sites for relocation;

■ provided with resettlement assistance, if required; and

■ restored to livelihoods whose standards compare with, and preferably exceed,those that prevailed before resettlement.

These conditions are not commonly prescribed in the legislation of IFC member coun-tries. Therefore, the development of the RAP legal framework requires the sponsor tocompare prevailing laws and regulations of the host country with the policy on invol-untary resettlement. Where relevant legislation is lacking or where that legislation fallsshort of meeting the conditions established by the policy—as for example payment of

compensation for lost assets at full replacement cost—the sponsor must meet the con-ditions of the policy. In other words, the sponsor must identify gaps between local lawand IFC policy and propose a strategy to address those gaps. In doing so, the sponsormust be careful not to compromise relations with the host government by appearing toinfringe on its sovereignty. In such cases, bringing a project’s compensation frameworkinto compliance with IFC policy will require careful negotiations with the host govern-ment and determined coordination with local authorities on the part of the sponsor.Specific examples of such cases are provided in the paragraphs that follow.

The legal framework lays the foundation for three key elements of the RAP: 1) establish-ing rates of compensation; 2) determining eligibility for compensation and resettlementassistance, including development initiatives aimed at improving the social and eco-nomic well-being of affected populations; and 3) establishing mechanisms to resolvegrievances among affected populations related to compensation and eligibility. The first


Table 5: Legislation Relevant to Resettlement for an Infrastructure Project in China (sample)


two components are discussed in the context of the RAP compensationframework below. Mechanisms to ensure the timely redress of grievances arediscussed later in this section.

Compensation Framework

The RAP compensation framework specifies all forms of asset ownership oruse rights among the population affected by the project and the project’s strat-egy for compensating them for the partial or complete loss of those assets (seefigure 4). The compensation framework should include a description of thefollowing: 1) any compensation guidelines established by the host govern-ment; 2) in the absence of established guidelines, the methodology that theproject sponsor will use to value losses; 3) the proposed types and levels ofcompensation to be paid; 4) compensation and assistance elegibility criteria;and 5) how and when compensation will be paid.

Compensation—IFC expects the project to compensate affected people for loss of phys-ical assets, revenue, and income resulting from economic displacement or physical relo-cation whether these losses are temporary or permanent. If domestic law does notalready specify such a framework, the project sponsor should establish transparent meth-ods for the valuation of all assets affected by the project. These methods should includeconsultation with representatives of the affected communities to assess the adequacyand acceptability of the proposed compensation. Such consultation is especially impor-tant where market values for assets are not well established (property markets in emerg-ing economies) or intangible (social or cultural values that are not readily monetized).

After acceptable compensation rates are established, they are applied to the RAP inven-tory of losses for all households and enterprises affected by the project. A simple soft-ware application can be used to create a database that combines census data, invento-ry of losses data, and compensation formulas. This database can then be used to budg-et compensation payments and to track progress in settling compensation claims. Table6 provides an example of a compensation payment database format.

If compensation procedures are not addressed under domestic law, the project sponsorshould also establish a method for delivering compensation (either cash payments or in-kind allocations, as in the case of land-for-land compensation). In most cases, the proj-ect sponsor will collaborate with local government authorities in the distribution of com-pensation payments. Those eligible for compensation should be given advance notice ofthe date, time, and place of payments via public announcement. Receipts should besigned by all those receiving compensation payments and retained for auditing purpos-es. The payment of compensation should be monitored and verified by representativesof the project sponsor as well as representatives of the affected communities, which canoften include community-based organizations and local NGOs. It may be appropriatefor the sponsor and government authorities to engage the services of a registered audit-ing firm to monitor compensation payments.

IFC expects all peopleaffected by a project tobe compensated for lossof physical assets, revenue, and incomeresulting from economicdisplacement or physicalrelocation.

IFC H

andbook for Preparing a Resettlem

ent Action Plan

29

Figure 4: Illustration of Compensation Strategies for Linear Resettlement Associated with a Highway Project

Source: E

SG

/ WS

Atkins / F. G

iovannetti


The sponsor must clearly demonstrate the adequacy of all compensation rates in the RAPdocument. Once acceptable compensation rates are established, the sponsor or anyother party responsible for resettlement should apply these rates consistently throughoutthe life of the project or adjust the rates consistently if compensation payments are stag-gered over the life of the project. Adjustment of the rates for one group—for example toinduce a hold-out household or group to vacate the project site—may expose the spon-sor to unjustified and exaggerated compensation claims from other affected groups ortheir representatives. For example, a sponsor of an infrastructure project in CentralAmerica established a fair rate of compensation for land required by its project. Themajority of occupants of that land accepted the compensation and vacated the land. Theremaining occupants demanded higher rates of compensation, which, in the interest ofavoiding project delays, the sponsor agreed to pay. On learning of the higher compen-sation payments, a number of families in the first group reoccupied the project site anddemanded compensation equivalent to that received by the second group. The firstgroup has since brought suit against the sponsor claiming that their original compensa-tion was inadequate.

One of the fundamental tenets of the involuntary resettlement policy is that, where fea-sible and where desired by the affected people, land-based resettlement options shouldbe provided to displaced people whose livelihoods are based on use of the land (forinstance, farmers and herders). These options may include resettlement on or access toland acquired or purchased for resettlement. Such land-for-land compensation shouldbe made according to the following principles:

■ New land should be equivalent or superior in productive potential to the landfrom which people will be displaced;

Compensation ratesshould be applied consistently throughoutthe life of the project toprotect the sponsor fromunjustified and exaggerated claims.

Table 6: Database Format for Assessing and Processing Compensation Claims (sample)


■ New land should be located in reasonable proximity to land from which peoplewill be displaced;

■ New land should be provided free of any “transaction costs” such as registrationfees, transfer taxes, or customary tributes;

■ New land should be prepared (cleared, leveled, and made accessible) for pro-ductive levels similar to those of the land from which people will be displaced(preferably, affected people should be paid by the project to do this work).

In situations where arable land available for compensation is fundamentally differentfrom the land from which people will be displaced, the project should provide techni-cal support and appropriate inputs to farmers to bring the land into full productive poten-tial. In situations where arable land is not available, the project should provide support(such as skills training, grants, or credit for enterprise start-up) to affected people toadjust to nonfarming occupations as part of their resettlement assistance. The same prin-ciple applies to people whose principal livelihood is animal husbandry, but for whomsuitable pasture or grazing land is not available.

In situations where cash compensation is appropriate (or where affected persons—afterinformed consultation—choose cash rather than land-for-land compensation), the sponsorshould calculate and award compensation payments according to the following principles:

■ Compensation rates should be calculated in consultation with representatives ofaffected populations to ensure that rates are fair and adequate;

■ Compensation for land, crops, trees, and other fixed assets should be sufficientto enable affected people to restore their standard of living after resettlement;

■ Compensation for structures should cover full replacement cost exclusive ofdepreciation and inclusive of all fees (such as construction permits and titlecharges) and labor costs;

■ Compensation payments should be made before any acquisition of assets orphysical resettlement takes place unless those payments are staggered to enableaffected people to begin preparation of new sites;

■ Compensation for dismantled infrastructure or disrupted services should be paidto affected communities, or to local government as appropriate, at full replace-ment cost, before civil works begin;

■ Where necessary and feasible, local currency compensation values should beindexed to the U.S. dollar or other stable currency to protect affected peopleagainst local currency fluctuations and inflation;

■ Compensation for lost earnings should be paid to proprietors and employees forthe duration of work stoppages resulting from the relocation of enterprises.


Where prevailing domestic law does not meet the IFC policy of compensation at fullreplacement cost (that is, market value plus transaction costs), the project sponsor mustsupplement payments with additional measures to meet the replacement cost standard.If local laws preclude such “topping up” of compensation payments, the sponsor maychoose to provide allowances or supplementary assistance in cash or kind to eligibleaffected people. See the Glossary of Terms for an explanation of what constitutesreplacement cost for land and structures.

Eligibility for Assistance—The project sponsor must establish and disclose the criteria bywhich affected people will be considered eligible for compensation and other resettlementassistance. This procedure should include provisions for consultations with affected per-sons, households, and community leaders, local authorities, and, as appropriate, NGOs.

Under the IFC policy, displaced persons in the following two groups are entitled to com-pensation for loss of land or other assets, such as dwellings and crops taken for projectpurposes, and to resettlement assistance:

■ Those who have formal legal rights to land or other affected assets (includingcustomary and traditional rights to the use of land or other assets); and

■ Those who do not have formal legal rights to land or other assets at the time ofthe census, but who have claim to such legal rights by virtue of occupation oruse of those assets.

In other words, the absence of legal title to land or other assets is not, in itself, a barto compensation for lost assets or to other resettlement assistance. Persons belongingto the second group above may or may not be present in the project area during the timeof the census. Seasonal resource users such as herders or fishing families, hunters, andgatherers may have interdependent economic relations with communities located with-in the project area that will be adversely affected by resettlement. The existence of suchpopulations and economic relationships can be determined through direct consultationand through socioeconomic surveys.

The population affected by the project may include people who are residing on or oth-erwise occupying land at or near the project site in violation of local or national laws.People who belong to this group, often referred to as “squatters,” are not entitled to com-pensation for loss of land under IFC policy. However, they are entitled to compensationfor any improvements made to the land (such as structures, perennial crops, and trees)as well as to resettlement assistance if they occupied the project area before an estab-lished cut-off date.

In the interest of the public good, IFC encourages project sponsors to work with hostgovernments to resettle squatters in areas where they can establish legal title or, in thecase of informal businesses, regularize their status. Formal recognition of those claimsmay simplify the resettlement of squatters by entitling them to the same resettlementassistance package as those project-affected people having legal title to lands affectedby the project.

Where prevailing domestic law does notmeet the standard ofcompensation at fullreplacement cost, theproject sponsor shouldprovide supplementaryassistance.

Squatters are entitled toresettlement assistanceif they occupied theproject area before anestablished cut-off date.


If adequate public notice of the cut-off date has been given, persons who settle in theproject site after that date are not entitled to compensation for lost assets or any otherform of resettlement assistance.

The project sponsor should prepare an entitlement matrix with respect to both tempo-rary and permanent displacement that identifies:

■ all categories of affected people, including property owners and land right hold-ers, tenants, squatters, sharecroppers, grazers, nomadic pastoralists and othernatural resource users, shopkeepers, vendors and other service providers, com-munities, and vulnerable groups;

■ all types of loss associated with each category, including loss of physical assets;loss of access to physical assets; loss of wages, rent, or sales earnings; loss ofpublic infrastructure and elements of cultural significance (as identified in theinventory of losses); and,

■ all types of compensation and assistance to which each category is entitled,including: compensation for or replacement of land and natural resources; com-pensation for structures, assets, wages, rent, or sales earnings; moving assistanceand post-resettlement support (such as technical assistance, extension and skillstraining, and access to credit).

The sponsor should ensure that eligibility criteria for relocation and cost recovery are notdisadvantageous to women, whose incomes tend to be lower and less stable than thoseof men. Eligibility for relocation and the allocation of new sites should be made to thehead of the household, male or female. Land titles, use-right agreements, or loan titlesshould, if possible, be registered in the name of husband and wife, or in the name of thewoman if she is the head of household. A sample entitlement matrix—from an electric-ity transmission line project—is illustrated in table 7.

Responsibility and Schedule for Compensation Payments—The RAP compensationframework specifies the organization or agency responsible for delivering entitlementsto all groups elegible for resettlement assistance and a timetable for the delivery of enti-tlements. People affected by a project may have multiple entitlements. For example, afarmer who loses productive land to an oil pipeline project may be entitled to an alter-native plot of land and compensation for standing crops from the local civil administra-tion. The same farmer may be entitled to agricultural extension services from the districtagricultural office to help him maximize crop yields from his new plot of land. Similarly,a shopkeeper who loses her business and clientele due to the extension of an airport run-way may be entitled to compensation for her shop and inventory. The same shopkeepermay be entitled to alternative job training or credit to establish a new business from anNGO providing such services on behalf of the project sponsor.

Resettlement planners should establish a timetable for the payment of compensation anddelivery of related entitlements to each category of eligible people. It may be advisablefor compensation payments to be staggered or paid out in installments to allow affectedpeople to establish themselves at the new site (to prepare farm plots, to construct hous-

The sponsor shouldensure that eligibilitycriteria for relocationand cost recovery are

not disadvantageous towomen, whose incomes

tend to be lower andless stable than those

of men.

Staggering compensation payments

enables resettlementplanners to determine ifpayments are being used

for their intended purpose and, if not, to

adjust the compensationframework accordingly.


es or shops). The staggering of compensation payments enables resettlement planners todetermine if payments are being used for their intended purpose and, if not, to adjust thecompensation framework accordingly. A compensation timetable can be incorporated

into the overall schedule of RAP implementation (see Budget andImplementation section below), and the timetable’s deadlines can serve asimplementation milestones for the purposes of RAP monitoring (seeMonitoring and Evaluation section below).

Resettlement Assistance and Livelihood Restoration

Wherever possible, the project sponsor should avoid or minimize the dis-placement of people by exploring alternative project designs (for example,realignment of a gas pipeline to bypass human settlements). Where displace-ment is unavoidable, the sponsor should plan and execute resettlement asa development initiative that provides displaced persons with opportunitiesto participate in planning and implementing resettlement activities as well

as to restore and improve their livelihoods. IFC recommends that project sponsorsundertake the following actions on behalf of all affected people, including members ofthe host communities in which displaced people will be settled:

■ Inform affected people of their options and rights concerning resettlement;

Table 7: Entitlement Matrix (sample)


■ Provide technically and economically feasible options for resettlement basedon consultation with affected people and assessment of resettlement alternatives;

■ Whether physical relocation is required or not, provide affected people withprompt and effective compensation at full replacement value for loss of assets dueto project activities;

■ Where physical relocation is necessary, provide assistance with relocation expens-es (moving allowances, transportation, special assistance and health care for vul-nerable groups);

■ Where physical relocation is necessary, provide temporary housing, permanenthousing sites, and resources (in cash or in kind) for the construction of perma-nent housing—inclusive of all fees, taxes, customary tributes, and utility hook-up charges—or, as required, agricultural sites for which a combination of pro-ductive potential, locational advantages, and other factors are at least equivalentto the advantages of the old site.

■ Provide affected people with transitional financial support (such as short-termemployment, subsistence support, or salary maintenance); and

■ Where necessary, provide affected people with development assistance in addi-tion to compensation for lost assets described above such as land preparation,agricultural inputs, and credit facilities and for training and employment oppor-tunities.

The project sponsor should undertake all land acquisition, provide compensation for lostassets, and initiate resettlement related to a specific project before that project com-mences. IFC often links the implementation of resettlement activities to the scheduleof disbursements for project financing. In doing so, IFC ensures that displacement doesnot occur before the sponsor has carried out the necessary measures for the resettlementof the affected people. In particular, the acquisition of land and other assets should nottake place until compensation is paid and, where applicable, resettlement sites andmoving allowances are provided to displaced persons. In situations where the responsi-bility for some tasks related to resettlement is passed through to contractors (such aspreparation of resettlement sites, provision of temporary social services, and transporta-tion), the sponsor should ensure that appropriate arrangements, such as penalty clausesfor nonperformance, are written into contracts and enforced. Similarly, in situationswhere a host government assumes responsibility for resettlement with financial supportfrom the sponsor, the sponsor should negotiate performance-based implementationagreements with the appropriate government agency linking disbursement of funds ininstallments to the achievement of agreed milestones.

As noted in the discussion of the compensation framework, the sponsor must be sensi-tive to the special needs of women and other vulnerable groups in the planning andimplementation of resettlement and livelihood restoration. Men and women have differ-ent needs and opportunities for access to land, resources, employment, and markets.

People must be providedwith options regarding

compensation, resettlement assistance,

and livelihood restora-tion packages.

Sponsors should ensurethat project contractors

abide by all RAP principles and procedures.

Men and women havedifferent opportunities

for access to land,resources, employment,

and markets.Resettlement will

therefore affect men’sand women’s livelihoods

differently.


Resettlement will therefore affect men’s and women’s livelihoods differently. A discus-sion of the special needs of women and vulnerable groups is included below.

Resettlement involving physical relocation of people affected by the project will have thefollowing components:

■ site selection and preparation;■ influx management;■ relocation schedule and assistance;■ replacement of services and enterprises;■ restoration of livelihood;■ treatment of cultural property; and■ special assistance for women and vulnerable groups.

Selection and Preparation of the Resettlement Site—The resettlement site must be cho-sen through consultation with all displaced people and host communities. Resourcesand plans for land use must be evaluated. Site selection and the shelter and infrastruc-ture options provided at the new sites should reflect both the preferences of the affect-ed population and the best opportunities for timely restoration of livelihoods. The twomost critical concerns in selection of a resettlement site are location and communitypreservation. The selection of resettlement sites that provide people with reliable accessto productive resources (arable and grazing land, water, and woodlands), employment,and business opportunities is key to the restoration of livelihoods. Resettlement optionsshould avoid breaking up communities, because the maintenance of the social networkslinking members of the affected communities may be critical to the successful adaptationof those communities to their new circumstances. Table 8 illustrates some resettlementoptions that address these concerns. Though community preservation is a primary con-cern, some members of a community may have other settlement preferences, including apreference not to remain part of the affected community. For this reason, all communitymembers must be consulted and provided with appropriate options for resettlement.

The RAP must describe the site selection process in detail; provide a description of theselected site (including alternative sites); describe preliminary site evaluation (includingthe outcome of the environmental assessment of sites and social assessments of the hostpopulation); and describe housing options, land preparation requirements, and serviceinfrastructure (access roads/pathways, piped water supply, electricity, lighting, drainage,and waste management). The sponsor must ensure that all affected households andenterprises receive clear title to their new sites free of registration fees, licensing fees, orcustomary tribute payments. Special provisions may have to be made for householdsheaded by women and children and other vulnerable groups in circumstances wherelocal law or custom does not fully recognize their rights to own or register land, assets,or enterprises. Such provisions may be difficult to implement if the host governmentdoes not recognize private ownership of land. Nevertheless, the sponsor should makeevery effort to reach agreements with host governments that ensure the security of affect-ed people’s ownership of land and assets.

Influx Management—The problems of an influx of newcomers and resettlement areoften closely related and have similar effects on host communities. Resettlement sites are

The two most criticalconcerns in site selectionare location and community preservation.


often located close to project areas and thus represent an obvious collection point forjob seekers. In many societies providing accommodation and support to extended fam-ily members is an important social obligation. Large-scale projects (in particular miningand power projects in remote rural areas) often attract significant numbers of newcom-ers seeking employment or other opportunities associated with construction and opera-tion of the project. For example, on a mine project in Mali, the influx and largely uncon-trolled settlement of more than 3,500 newcomers had severe negative effects on hostcommunities in and around the project area as well as on the project itself. Subsequentexpansion of the mine necessitated resettlement of newcomers within only two yearsafter their arrival. To avoid such circumstances, project planners should take a proactiveapproach and prepare an influx management plan in association with RAP initiatives aspart of the overall project environmental impact assessment. The expertise of the RAPteam and the methodology of the RAP process can be applied to the management ofpopulation influxes to develop a single coordinated response to the social and econom-ic effects of a project.

Relocation Schedule and Assistance—The RAP should outline the details of the physicalmovement of people scheduled for relocation to the resettlement sites. This outline shouldinclude dates and times of movement, how information on the relocation will be dissem-inated to the affected people, logistics of transportation of people and belongings to thesite, and arrangements for temporary shelter and services (food, water, emergency medicalcare, and waste management) en route to and on arrival at the site. Any moving allowancesto be paid in lieu of relocation assistance must be documented and justified. Provisionsmay have to be made for members of vulnerable groups (such as pregnant women, theaged, or handicapped) who require special assistance with physical relocation.

Table 8: Options for Physical Resettlement

The influx of both newcomers and resettled

populations is oftenclosely related and hassimilar impacts on host

communities.


Replacement of Services and Enterprises—The RAP should provide detailson how the sponsor plans to replace social services such as health clinics andschools as well as shops, service providers, and other community services.For example, the sponsor may consider establishing a sheltered and servicedmarketplace central to the relocation site(s) to encourage merchants andother enterprises to relocate with the affected population. The sponsor mustmake every effort to ensure the continuity of social services provided by gov-ernment agencies to the resettlement sites. In other words, the governmentmust make a commitment to staff, operate, and maintain facilities. A healthcenter without nurses or a school building without teachers serves little pur-pose. In the absence of government commitments, the sponsor will need toidentify and finance appropriate NGOs or community organizations to sup-port these services until the government can assume control of them.

Livelihood Restoration—In cases where resettlement affects the income-earning capac-ity of the displaced families, compensation alone does not guarantee the restoration orimprovement of their living standards. As noted in the introduction, IFC encourages proj-ect sponsors to undertake resettlement as a sustainable development initiative, that is, aninitiative that leads to an improved standard of living for project affected people. The fol-lowing are recommendations for the design of rehabilitation measures for improved andsustainable livelihoods.

■ Land-based livelihoods—Resettlement sites may require dependable access tograzing land, forest, and water resources; physical preparation of farm land(clearing, leveling, creating access routes, and soil stabilization); fencing for pas-ture or cropland; agricultural inputs (seeds, seedlings, fertilizer, irrigation); vet-erinary care; small-scale credit including rice banks, cattle banks, and cashloans; and access to markets.

■ Wage-based livelihoods—Wage earners in the community may benefit fromskills training and job placement, provisions made in contracts with project sub-contractors for employment of qualified local workers, unemployment insur-ance, and small-scale credit to finance startup enterprises. Sponsors should pro-vide sufficient lead time for training of affected people to enable them to com-pete for jobs related to the project.

■ Enterprise-based livelihoods—Established and nascent entrepreneurs and arti-sans may benefit from credit or training (business planning, marketing, inventory,and quality control) to expand their business and generate local employment.Sponsors can promote local enterprise by procuring goods and services for theirprojects from local suppliers.

Resettlement allowances are occasionally offered in cash to those people who do notwish to continue their land-based livelihoods and for whom jobs cannot be provided.When payment of a cash resettlement subsidy is considered, the sponsor should assessthe abilities of the affected population to use cash to restore their standard of living. Itis common for households in subsistence-based economies as well as poorer house-holds in cash-based economies to divert cash compensation from longer-term invest-

The sponsor must makeevery effort to ensure thecontinuity of social services provided by government agencies tothe resettlement sites.

IFC encourages projectsponsors to undertakeresettlement as an initiative that leads to animproved standard of living for people affectedby the project.


ment to short-term consumption. Under these circumstances, compensationin kind (for example, livestock or other moveable/transferable property) maybe more appropriate.RnglishTreatment of Cultural Property—The RAP should document all necessaryefforts to protect, move, and restore the cultural property of all affected peo-ple. Depending on the complexity of its impact, the project may require a sep-arate cultural property management plan. In this case, the RAP may not haveto address the issue. Nonetheless, the movement of cultural artifacts must becarried out in consultation with communities and in collaboration with thedesignated government agencies. The relocation of artifacts and structuresassociated with religious worship can occur only after consultation with ritu-al practitioners (priests and spirit mediums) and must include compensationfor associated rituals. Families must be compensated for both the logistical and the ritualcosts of exhuming family graves and transferring remains to a new site. Sponsors whoseprojects affect cultural property will be expected to comply with IFC’s safeguard policyOPN 11.03 on Cultural Property.

Special Assistance for Women and Vulnerable Groups—Women comprise a dispropor-tionately large number of the poor in most countries. Gender discrimination limitswomen’s access to resources, opportunities, and public services necessary to improvethe standard of living for themselves and their families. As a result, women are often thefirst to suffer when resettlement is planned or executed badly. Women tend to rely moreheavily than men do on informal support networks, such as the help of friends, neigh-bors, or relatives for child care. Women with children also have less physical mobility totravel to find ways of earning a livelihood. For these reasons, the sponsors’ efforts tomaintain the social continuity of communities affected by a project—whether throughthe physical design of new sites, measures to prevent the disintegration of the commu-nity, or the provision of specialized social services at those sites—are important. Someof the immediate and practical initiatives that can be considered to improve women’sadaptation to the resettlement site include:

■ ensuring that land titles and compensation entitlements are issued in the nameof both spouses;

■ reducing women’s workloads by providing, for example, standpipes, handpumps, grinding mills, woodlots, fuel efficient stoves, ox carts, and plows;

■ improving health services by providing training for village midwives, primaryhealth care centers, child spacing/family planning counseling, clean water sup-ply, and sanitation training;

■ improving family services by providing immunizations, child care for wage-earning women, primary schools, inputs for food-crop production, and housing;and

■ increasing incomes by setting up credit groups, skills training, and access to markets.

Women are often thefirst to suffer when

resettlement is badlyplanned or executed.


However, the social or legal status of women is likely to remain circumscribed and, thus,their ability to improve their own and their family’s livelihoods will be compromisedwithout longer-term “strategic” efforts to change gender discrimination. Some strategicinitiatives that can improve women’s livelihoods in their new settings include:

■ improving educational opportunities (providing literacy and numeracy training,promoting girls’ education);

■ improving access to productive assets (credit, legal reform);

■ improving participation in decisionmaking (support for women’s interestgroups); and

■ promoting equal opportunity for women’s employment.

These initiatives may help women adapt to the resettlement site. However, the social orlegal status of women is likely to remain circumscribed and, thus, their ability to improvetheir own and their family’s livelihoods will be compromised without longer-term strate-gic efforts to change gender discrimination.

Vulnerable groups can include households headed by women, households victimizedby HIV/AIDS that are headed by children, households made up of the aged or handi-capped, households whose members are impoverished, or households whose membersare socially stigmatized (as a result of traditional or cultural bias) and economically mar-ginalized. Special assistance to vulnerable groups may consist of the following:

■ provision for separate and confidential consultation;

■ priority in site selection in the host area;

■ relocation near to kin and former neighbors;

■ provision of a contractor, if necessary, to construct their new house;

■ assistance with dismantling salvageable materials from their original home;

■ priority access to all other mitigation and development assistance; and

■ monitoring of nutritional and health status to ensure successful integration intothe resettled community.

The RAP should document the rehabilitation measures that the sponsor will put intoeffect for all vulnerable groups during the physical relocation and rehabilitation of affect-ed communities.


Budget and Implementation Schedule

Project sponsors commonly underestimate the actual costs of resettlementplanning and implementation. It is essential that all costs be estimated care-fully and included in a detailed RAP budget. Without an accurate assessmentof the costs of land acquisition, compensation for lost assets, and physicaldisplacement, project planners cannot determine the real cost of projectdesign alternatives such as alternative routes for power transmission lines oralternative sites for greenfield projects. The sponsor should itemize resettle-ment costs by categories of impact, entitlement, and other resettlementexpenditures including training, project management, and monitoring. Theresults should be presented in a tabular form that illustrates expenditures overthe life of the project. To ensure that all adverse impacts have been taken intoaccount, budget line items should be checked against categories of adverseimpact and entitlements. A sample budget is provided in annex C.

The RAP budget must include a justification of all assumptions made in calculating com-pensation rates and other cost estimates and must take into account both physical andcost contingencies. As noted above, the cash value of compensation packages should beindexed to U.S. dollars or another stable currency to protect those eligible for cash com-pensation from local currency devaluation or inflation. Alternatively, the sponsor canbudget allowances to offset currency fluctuations as a contingency. This practice is par-ticularly important when resettlement will be carried out in the relatively distant futureor in phases over a long period.

The sponsor should be explicit about the source of funding for the RAP budget. In situ-ations where the host government assumes responsibility for the payment of compensa-tion and resettlement assistance allowances, the sponsor should collaborate with theresponsible government agency to ensure that payments are made on schedule. If thesponsor is financing government resettlement efforts, it should do so in installments andlink disbursement of funds to performance-based milestones. In situations where thesponsor assumes sole responsibility for resettlement funding, it must describe its arrange-ments for the timely disbursal of funds.

The RAP budget should be linked with a detailed implementation schedule for all keyresettlement and rehabilitation activities. This schedule should, in turn, be synchronizedwith the project’s schedule of civil works construction (see Table 9). Timing of the RAPfield activities (consultation, census, and survey implementation) is crucial: commence-ment of field activities too soon before the project begins may raise local expectationsand attract newcomers; commencement of activities too late after the project starts mayinterfere with project implementation. Planners should be attentive to the agriculturaland employment cycles of affected people and avoid scheduling key resettlement activ-ities at times that may disrupt these cycles. Linking resettlement and construction sched-ules ensures that project managers place key resettlement activities on the same criticalpath as key project construction activities. Linking schedules in this way creates animperative for coordinating resettlement with other project activities throughout thechain of project management.

Accurate costing ofresettlement is crucial

to the design of capitaldevelopment projects.

The RAP implementationschedule should be

synchronized with theoverall project

implementation schedule.

Organizational Responsibilities

The RAP must identify and provide details on the roles and responsibilities of all organ-izations—public or private, governmental or nongovernmental—that will be responsiblefor resettlement activities (see Figure 5). IFC expects the sponsor to assess the capacityof these organizations to carry out their responsibilities.

Host governments may reserve the right to manage land acquisition, compensation pay-ments, and resettlement associated with a project. Nevertheless, IFC requires that theoutcome of a RAP conform to the objectives of the involuntary resettlement policy. IFCexpects the project sponsor to obtain a formal agreement from the government toimplement resettlement in accordance with the RAP.

Where IFC’s review of the resettlement plan proposed by the relevant governmentagency reveals deficiencies, it may delay processing of the project while it and all con-cerned parties agree on the manner in which the relevant governmental agency’s effortscan be supported or supplemented. In such cases, IFC expects the project sponsor to


IFC expects the projectsponsor to play anactive role during thepreparation, implementation, andmonitoring of the RAPeven if it is carried outby the host government.

Table 9: Sample RAP Implementation Schedule


play an active role during the preparation, implementation, and monitoring of the RAPand to coordinate with the relevant government agency those aspects of resettlementthat can be facilitated more efficiently by the sponsor and other entities such as NGOs.

Depending on the scale of resettlement associated with a project, it may be appropriatefor the sponsor to create a resettlement advisory group (or steering committee, or taskforce) to coordinate the implementation of a RAP. This advisory group should compriserepresentatives of the project sponsor, relevant government line and administrativedepartments, community organizations, NGOs involved in support of resettlement aswell as representatives of the communities affected by the project, including host com-munities. The advisory group should convene at regular intervals during the design andimplementation phases of the RAP to ensure the regular exchange of information amongall parties and the coordination of all resettlement activities. Membership of the adviso-ry group should include government representatives with the requisite authority overboth line and administrative departments. This level of authority is required to ensuretimely implementation of resettlement activities and redress of grievances.

Figure 5: Organizational Framework for Resettlement Management (sample)


Figure 6: Roles and Scope of a Resettlement Unit (sample)


Under circumstances in which it assumes direct responsibility for the reset-tlement of affected people, the sponsor typically establishes a resettlementunit within the overall management structure of the project to coordinate,manage, and monitor the practical day-to-day implementation of all resettle-ment activities. The head of this unit—who reports directly to senior projectmanagement—supervises all project staff members responsible for activitiesrelated to resettlement as well as any contractors or NGOs responsible forresettlement services such as the implementation of socioeconomic surveys,construction of resettlement housing, promotion of development initiatives, orthe monitoring of RAP implementation. Figure 6 illustrates the organization ofa resettlement unit and the roles and responsibilities of the unit’s components.

Regardless of the extent to which it is directly responsible for the implemen-tation of the RAP, the sponsor should designate an individual within the proj-ect management structure to coordinate the construction and resettlementactivities of the project. Preferably, this individual’s responsibilities should bededicated to RAP implementation.

Early in the resettlement process, the sponsor should encourage the formation of reset-tlement committees within the affected population. These committees should comprisethe formal leadership of the affected population as well as representatives of interestgroups within the community that may have no formal leadership role (such as artisans,landless householders, and women). The resettlement committees can play an importantrole in negotiating resettlement compensation with project management, designingstrategies for restoration and development of livelihood strategies, and monitoring over-all implementation of the RAP.

Consultation and Participation

Projects resulting in physical or economic displacement have special consultationresponsibilities in addition to IFC’s regular public disclosure and consultation require-ments. Effective resettlement planning requires regular consultation with a wide range ofproject stakeholders. Broadly defined, stakeholders include any individual or groupaffected by, or that believes it is affected by, the project; and any individual or group thatcan play a significant role in shaping or affecting the project, either positively or nega-tively, including the host community. Early consultation helps to manage public expec-tations concerning the impact of a project and its expected benefits. Subsequent con-sultations provide opportunities for the sponsor and representatives of people affected bythe project to negotiate compensation packages and eligibility requirements, resettle-ment assistance, and the timing of resettlement activities. Project consultation with peo-ple affected by resettlement is mandatory.

Information Exchange—The free flow of information between project sponsors andstakeholders is essential to promoting effective public consultation and participation andto achieving the objectives of resettlement planning. Early in the project developmentprocess, the sponsor should:

Early consultation helpsto manage public expectations concerningthe impact and benefitsof a project.


■ Identify all stakeholders;

■ Inform local government, village leaders, and local community organizations ofthe plan for the project as soon as feasible and ask them to inform their con-stituents;

■ Brief all project line managers and personnel who will interact on a regular basiswith people affected by the project regarding the anticipated effects of the proj-ect and measures to mitigate its impact;

■ After completion of census and the public notice of the eligibility cut-off date,arrange for the government to issue formal notice banning the construction orapproval of construction of new buildings or capital improvements in areas tobe affected by the project;

■ Prepare an illustrated resettlement information booklet providing details on eli-gibility, rates of compensation and other entitlements, a timetable for imple-mentation, and all applicable grievance procedures; and

■ Prepare and issue regular resettlement information updates.

Keeping affected people fully informed of their rights and responsibilities is crucial to thesuccess of resettlement planning. To achieve this objective, information must be madeaccessible and understandable. Information should be translated into local dialects andindigenous languages and broadcast through media that are accessible to literate andnonliterate individuals alike (radio, television, mobile video broadcasting, public noticeboard, newspapers, leaflets and flyers, town crier, and door-to-door canvassing). Specialefforts should be made to reach vulnerable groups lacking access to public media andinformation exchange.

Promoting Participation—The sponsor must initiate and facilitate a series of consulta-tions with project stakeholders throughout the planning and implementation of a RAP.The purpose of these consultations is to inform stakeholders about the project and itseffects and to provide opportunities for people to voice their concerns and propose alter-natives.

Formal consultations convened by the sponsor should include sponsor representatives,project managers, relevant government authorities, representatives of concerned NGOs,and members of both displaced and host communities. Discussions should center on theeffects of the project and measures to mitigate those effects. Because of discriminationwithin their societies, women and members of other vulnerable groups may find it diffi-cult to defend their interests in a public forum. For this reason, it is important for projectmanagement or the agencies responsible for RAP planning and implementation toemploy women and members of other vulnerable groups. These staff members canundertake outreach efforts, such as focus group consultation, to learn the concerns ofvulnerable groups and convey them to resettlement planners and project managers.

Project informationshould be translatedinto local dialects andindigenous languagesand broadcast throughmedia that are accessible to literateand nonliterate alike.

Women and members ofother vulnerable groupsmay find it difficult todefend their interests ina public forum.


The objective of these consultations should be to secure the participation of all peopleaffected by the project in their own resettlement planning and implementation, particu-larly in the following areas:

■ alternative project design;■ assessment of project impacts;■ resettlement strategy;■ compensation rates and eligibility for entitlements;■ choice of resettlement site and timing of relocation;■ development opportunities and initiatives;■ development of procedures for redressing grievances and resolving disputes; and■ mechanisms for monitoring and evaluation and for implementing corrective actions.

Regular consultation with affected people allows project management to monitor theadequacy and effectiveness of the RAP’s compensation packages, livelihood restorationefforts, and development initiatives.

Depending on the size and scope of the project, the sponsor may employ a communityliaison representative with a budget specifically for the facilitation and management ofpublic consultation. Alternatively, the sponsor may contract a reputable and experiencedNGO to provide the same services. However it chooses to manage information disclo-sure and public consultation, the sponsor must ensure that affected people have accessto information about the project and opportunities to seek redress of grievances relatingto the project.

Table 10: Consultation Log (sample)


Project management must document its information disclosure and public con-sultation efforts. This documentation should identify who was consulted, whatwas discussed, and what follow-up was required. A simple format for a publicconsultation log from an urban drainage project is illustrated in table 10.

For a more detailed discussion of the rationale and objectives of public con-sultation, see the IFC publication Doing Better Business through EffectivePublic Consultation and Disclosure: A Good Practice Manual. Public con-sultation undertaken during RAP planning and implementation should becited and summarized in the sponsor’s public consultation and disclosureplan. See IFC’s Guidance for Preparation of a Public Consultation andDisclosure Plan (December 1998) for more information.

Grievance Redress

Regardless of its scale, involuntary resettlement inevitably gives rise to grievances amongthe affected population over issues ranging from rates of compensation and eligibilitycriteria to the location of resettlement sites and the quality of services at those sites.Timely redress of such grievances is vital to the satisfactory implementation of reset-tlement and to completion of the project on schedule. The project sponsor must ensurethat procedures are in place to allow affected people to lodge a complaint or a claim(including claims that derive from customary law and usage) without cost and with theassurance of a timely and satisfactory resolution of that complaint or claim. In addition,the project may have to make special accommodations for women and members of vul-nerable groups to ensure that they have equal access to grievance redress procedures.Such accommodation may include employment of women or members of vulnerablegroups to facilitate the grievance redress process or to ensure that groups representingthe interests of women and other vulnerable groups take part in the process.

Grievances are best redressed through project management, local civil administration,or other channels of mediation acceptable to all parties. Such channels of mediationmay involve customary and traditional institutions of dispute resolution. The projectmanagement should make every effort to resolve grievances at the community level.Recourse to the legal system should be avoided except as a last resort.

Under circumstances where the host government assumes responsibility for resettle-ment, the project sponsor may be unable to guarantee fair and timely redress of griev-ances. However, IFC expects project sponsors to ensure that grievance redress proce-dures are in place and to monitor those procedures to ensure that grievances are beinghandled properly.

The RAP should describe the grievance redress framework that will be put in place bythe host government or project sponsor. This description should include:

IFC expects the projectsponsor to ensure thatgrievance redress procedures are in placeand to monitor those procedures to ensurethat grievances are handled properly.


■ institutional arrangements;

■ the procedures for recording and processing grievances;

■ the mechanisms for adjudicating grievances and appealing judgments; and

■ a schedule, with deadlines, for all steps in the grievance redress process.

Table 11 provides a sample of a grievance redress framework taken from a highway proj-ect in the Philippines.

Monitoring and Evaluation

IFC requires project sponsors to monitor and report on the effectiveness of RAPimplementation, including the physical progress of resettlement and rehabili-tation activities, the disbursement of compensation, the effectiveness of pub-lic consultation and participation activities, and the sustainability of incomerestoration and development efforts among affected communities. The objec-tive of monitoring is to provide the sponsor with feedback on RAP implemen-tation and to identify problems and successes as early as possible to allowtimely adjustment of implementation arrangements. For these reasons, RAPmonitoring and evaluation activities should be adequately funded, implemented by qual-ified specialists, and integrated into the overall project management process.

The RAP must provide a coherent monitoring plan that identifies the organizationalresponsibilities, the methodology, and the schedule for monitoring and reporting. The threecomponents of a monitoring plan should be performance monitoring, impact monitoring,

Table 11: Grievance Redress Framework (sample)

Grievance related to any aspect of the project will be handled through negotiations, which will be aimedat achieving consensus following the procedures outlined below:

1. Grievances will be filed by the person affected by the project with the Municipal ResettlementImplementation Committee (MRIC), which will act within 15 days on receipt thereof, except complaints and grievances that specifically pertain to the valuation of affected assets, since such will be determined by the courts.

2. If no understanding or amicable solution can be reached, or if the affected person does not receive aresponse from the MRIC within 15 days of the registry of the complaint, he/she can appeal to the Office of the Department of Public Works and Highways (ODPWH) Regional Director, which should act on thecomplaint/grievance within 15 days of the day of its filing.

3. If the affected person is not satisfied with the decision of the ODPWH Regional Director, he/she, as a lastresort, may submit the complaint to a court of law.

Affected persons will be exempt from all administrative and legal fees incurred pursuant to the grievanceredress procedures. All complaints received in writing (or written when received verbally) will be documented.


and completion audit (see Table 12). The scope of the monitoring plan should be com-mensurate with the scale and complexity of the RAP.

Performance Monitoring—Performance monitoring is an internal management functionallowing the sponsor or the organizations responsible for resettlement to measure phys-ical progress against milestones established in the RAP. Progress is usually reportedagainst a schedule of required actions (typically displayed through such devices as barcharts, Gantt charts, or MSProject tables). Examples of performance milestones couldinclude:

■ Public meetings held;■ Census, assets inventories, assessments, and socioeconomic studies completed;■ Grievance redress procedures in place and functioning;■ Compensation payments disbursed;■ Housing lots allocated;■ Housing and related infrastructure completed;■ Relocation of people completed;■ Income restoration and development activities initiated;■ Monitoring and evaluation reports submitted.

Table 12: RAP Monitoring Plan (sample)

RAP monitoring andevaluation activitiesshould be adequatelyfunded, implemented byqualified specialists, andintegrated into the overall project management system.


As noted above, performance monitoring of the RAP should be integrated into the over-all project management to ensure that RAP activities are synchronized with all projectimplementation activities. Performance monitoring reports should be prepared at regu-lar intervals (monthly, quarterly, semiannually, and annually) beginning with the com-mencement of any activities related to resettlement.

Impact Monitoring—Impact monitoring gauges the effectiveness of the RAP and itsimplementation in meeting the needs of the affected population. Depending on the scaleof resettlement, impact monitoring is conducted by the project’s management (such asan internal Project Resettlement Unit) or an independent external agency (for example,through a consultant, an NGO, or an academic institution) as determined by IFC. Thepurpose of impact monitoring is to provide the sponsor and/or the agency responsiblefor RAP implementation with an assessment of the effects of resettlement, to verify inter-nal performance monitoring, and to identify adjustments in the implementation of theRAP as required. Where feasible, affected people should be included in all phases ofimpact monitoring, including the identification and measurement of baseline indicators.Table 13 outlines a framework for RAP monitoring.

Table 13: RAP Monitoring Framework

1. Verify internal RAP implementation reports by a field check of the following:

• Payment of compensation including its levels and timing• Settlement of land/resource access claims• Preparation and adequacy of resettlement sites• Housing construction• Provision of employment, its adequacy and income levels• Adequacy of training and other developmental inputs• Rehabilitation of vulnerable groups• Infrastructure repair, relocation or replacement• Enterprise relocation, compensation and its adequacy• Transition allowances

2. Interview a random sample of affected people in open-ended discussion to assess their knowledge andconcerns regarding the resettlement process, their entitlements and rehabilitation measures.

3. Observe public consultations with affected people at the village or town level.

4. Observe the function of the resettlement operation at all levels to assess its effectiveness and compliancewith the RAP.

5. Check the type of grievance issues and the functioning of grievance redress mechanisms by reviewing theprocessing of appeals at all levels and interviewing aggrieved affected people.

6. Survey the standards of living of the affected people (and of an unaffected control group where feasible)before and after implementation of resettlement to assess whether the standards of living of the affectedpeople have improved or been maintained.

7. Advise project management regarding necessary improvements in the implementation of the RAP, if any.

Adapted from: The World Bank Resettlement Source Book.


The effects of a RAP are tracked against the baseline conditions of the population beforeresettlement. This baseline is established through the census, assets inventories, land-useassessments, and socioeconomic studies of the population and the area affected by theproject, as described in the Identification of Project Impacts and Affected Populations sec-tion above. The sponsor or the organization responsible for RAP implementation shouldestablish objectively verifiable indicators for measuring the impact of physical relocationon the health and welfare of affected population and the effectiveness of impact mitiga-tion measures, including livelihood restoration and development initiatives (see Table 14).

The RAP should budget sufficient resources to finance independent monitoring of theseindicators by qualified professionals on a regular basis during RAP implementation. Thismonitoring should continue for a number of years beyond the completion of the RAP toensure that the project’s income restoration efforts and development initiatives have suc-ceeded and that the affected population has successfully reestablished itself at its newsite. Table 14 illustrates an impact-monitoring schedule based on a set of generic indi-cators that measure social integration, public health, and economic well-being. Regularmonitoring alerts the sponsor to any problems arising among the affected population(such as decline in crop yields, increased incidence of disease, and decline in house-hold incomes) that should trigger remedial action on the part of the sponsor.

In addition to the quantitative indicators described above, impact monitoring should besupplemented by the use of qualitative indicators to assess the satisfaction of affectedpeople with resettlement initiatives and, thus, the adequacy of those initiatives. The mosteffective qualitative monitoring methodology is direct consultation with the affectedpopulations through regular meetings, focus group discussions, or similar forums estab-lished by the project sponsor for public participation as part of the consultation frame-work. Where feasible, it is advisable for the sponsor should allow for the participation ofaffected people in all phases of impact monitoring, including the identification andmeasurement of baseline indicators.

Completion Audit—Depending on the scale of displacement, IFC may require the spon-sor to undertake an evaluation by an independent third party to assess whether the out-come of the RAP complies with the involuntary resettlement policy. The key objective ofthis external evaluation, or completion audit, is to determine whether the sponsor’sefforts to restore the living standards of the affected population have been properly con-ceived and executed. The audit should verify that all physical inputs committed in theRAP have been delivered and all services provided. In addition, the audit should evalu-ate whether the mitigation actions prescribed in the RAP have had the desired effect. Thesocioeconomic status of the affected population, including the host population, shouldbe measured against the baseline conditions of the population before displacement, (asestablished through the census and socioeconomic studies.

The completion audit should be undertaken after all RAP inputs—including developmentinitiatives—have been completed, but well before IFC’s financial commitments to thesponsor have been met. The timing of the audit thus enables the sponsor to undertake cor-rective action, if any, as recommended by the auditors before the project is complete. Inthe majority of cases, the completion audit should bring to closure the sponsor’s liabili-ty for resettlement, compensation, livelihood restoration, and development support.

Monitoring extendsbeyond the completionof a RAP’s physicalinputs to ensure thatincome restoration anddevelopment initiativeshave been successful.

Where feasible, affectedpeople should be included in all phases ofimpact monitoring,including the identification and measurement of baselineindicators.


Table 14: Matrix of Selected Impact Indicators (sample)


IIIImplementation

Checklist


III Implementation ChecklistIFC’s environmental and social project assessment procedures are closelylinked and follow a parallel sequence. They involve a team of IFC technicalspecialists who consult with the sponsor to determine the scale of a project’senvironmental and social impacts and the scale of effort required to mitigatethem. IFC specialists continue to monitor and supervise projects approved forfinancing through the life of those projects.

When a project entails physical or economic displacement of people, theRAP becomes an essential component of that project’s environmental andsocial impact assessment and action plan. IFC specialists will require thesponsor to follow and complete a sequence of actions to satisfy applicableenvironmental and social safeguard policies before they approve the submis-sion of the project to the IFC board for consideration. Table 15 summarizesthat sequence of actions for a project that requires a formal RAP within theframework of a project development schedule: prefeasibility, feasibility, tech-nical design, implementation, and evaluation. The table can be used as achecklist for project sponsors and specialist consultants in preparing a proj-ect for IFC financing. The checklist applies specifically to situations in whichthe sponsor is fully responsible for RAP implementation. When the RAP isimplemented by the host government or another entity, the sponsor mayshare this checklist with the RAP managers as a guide to the sequence of stepsrecommended by IFC.


Table 15: Stages in Resettlement Action Planning and Implementation


IVOutline of a

ResettlementAction Plan


IV Ouline of a Resettlement Action PlanThis section provides an annotated outline for a Resettlement Action Plan.The outline is adapted from the World Bank Resettlement and RehabilitationGuidebook, which is available on CD-ROM from the World Bank InfoShop.Excerpts from the Guidebook, as well as other information related to resettlement, can be found on the World Bank Internet web site,http://www.wbIn0018.worldbank.org/essd/essd.nsf. and selecting “InvoluntaryResettlement” from the “All Topics” drop down menu.

Introduction■ Briefly describe the project.

■ List project components including associated facilities (if any).

■ Describe project components requiring land acquisition and resettlement; giveoverall estimates of land acquisition and resettlement.

Minimizing Resettlement■ Describe efforts made to minimize displacement.

■ Describe the results of these efforts.

■ Describe mechanisms used to minimize displacement during implementation.

Census and Socioeconomic Surveys■ Provide the results of the census, assets inventories, natural resource assess-

ments, and socioeconomic surveys.

■ Identify all categories of impacts and people affected.

■ Summarize consultations on the results of the various surveys with affected people.

■ Describe need for updates to census, assets inventories, resource assessments, andsocioeconomic surveys, if necessary, as part of RAP monitoring and evaluation.

Legal Framework■ Describe all relevant local laws and customs that apply to resettlement.

■ Identify gaps between local laws and World Bank Group policies, and describeproject-specific mechanisms to address conflicts.

■ Describe entitlement policies for each category of impact and specify that reset-tlement implementation will be based on specific provisions of agreed RAP.

■ Describe method of valuation used for affected structures, land, trees, and otherassets.

■ Prepare entitlement matrix.


Resettlement Sites■ Does the project require community relocation sites? Have affected people been

involved in a participatory process to identify sites, assess advantages and dis-advantages of each site, and select preferred sites?

■ Have the affected people been involved in developing an acceptable strategy forhousing replacement? Will new housing be constructed/allocated?

■ Does the project involve allocation of agricultural land or pasture/rangeland?Have the individual households that will be allocated lands been involved inidentifying potential new sites, and have they explicitly accepted the selectedsites?

■ Describe the specific process of involving affected populations in identifyingpotential housing sites, assessing advantages and disadvantages, and selectingsites.

■ Describe the feasibility studies conducted to determine the suitability of the pro-posed sites, including natural resource assessments (soils and land use capabil-ity, vegetation and livestock carrying capacity, water resource surveys) and envi-ronmental and social impact assessments of the sites.

■ Demonstrate that the land quality and area are adequate for allocation to all ofthe people eligible for allocation of agricultural land. Provide data on land qual-ity and capability, productive potential, and quantity.

■ Give calculations relating to site requirements and availability.

■ Describe mechanisms for: 1) procuring, 2) developing and 3) allotting resettle-ment sites, including the awarding of title or use rights to allotted lands.

■ Provide detailed description of the arrangements for site development for agri-culture, including funding of development costs.

■ Have the host communities been consulted about the RAP? Have they partici-pated in the identification of likely impacts on their communities, appropriatemitigation measures, and preparation of the RAP? Do the host communities havea share of the resettlement benefits?

Income Restoration■ Are the compensation entitlements sufficient to restore income streams for each cat-

egory of impact? What additional economic rehabilitation measures are necessary?

■ Briefly spell out the restoration strategies for each category of impact anddescribe their institutional, financial, and technical aspects.

■ Describe the process of consultation with affected populations and their partic-ipation in finalizing strategies for income restoration.

■ How do these strategies vary with the area of impact?


■ Does income restoration require change in livelihoods, development of alterna-tive farmlands or some other activities that require a substantial amount of train-ing, time for preparation, and implementation.

■ How are the risks of impoverishment to be addressed?

■ What are the main institutional and other risks for the smooth implementationof the resettlement programs?

■ Describe the process for monitoring the effectiveness of the income restorationmeasures.

■ Describe any social or community development programs currently operating inor around the project area. If programs exist, do they meet the development pri-orities of their target communities? Are there opportunities for the project pro-ponent to support new programs or expand existing programs to meet the devel-opment priorities of communities in the project area?

Institutional Arrangements■ Describe the institution(s) responsible for delivery of each item/activity in the enti-

tlement policy; implementation of income restoration programs; and coordinationof the activities associated with and described in the resettlement action plan.

■ State how coordination issues will be addressed in cases where resettlement isspread over a number of jurisdictions or where resettlement will be implement-ed in stages over a long period of time.

■ Identify the agency that will coordinate all implementing agencies. Does it havethe necessary mandate and resources?

■ Describe the external (nonproject) institutions involved in the process of incomerestoration (land development, land allocation, credit, training) and the mecha-nisms to ensure adequate performance of these institutions.

■ Discuss institutional capacity for and commitment to resettlement.

■ Describe mechanisms for ensuring independent monitoring, evaluation, andfinancial audit of the RAP and for ensuring that corrective measures are carriedout in a timely fashion.

Implementation Schedule■ List the chronological steps in implementation of the RAP, including identifica-

tion of agencies responsible for each activity and with a brief explanation ofeach activity.

■ Prepare a month-by-month implementation schedule (using a Gantt chart, forexample) of activities to be undertaken as part of resettlement implementation.

■ Describe the linkage between resettlement implementation and initiation of civilworks for each of the project components.


Participation and Consultation■ Describe the various stakeholders.

■ Describe the process of promoting consultation/participation of affected popu-lations and stakeholders in resettlement preparation and planning.

■ Describe the process of involving affected populations and other stakeholders inimplementation and monitoring.

■ Describe the plan for disseminating RAP information to affected populations andstakeholders, including information about compensation for lost assets, eligibil-ity for compensation, resettlement assistance, and grievance redress.

Grievance Redress■ Describe the step-by-step process for registering and addressing grievances and

provide specific details regarding a cost-free process for registering complaints,response time, and communication modes.

■ Describe the mechanism for appeal.

■ Describe the provisions for approaching civil courts if other options fail.

Monitoring and Evaluation■ Describe the internal/performance monitoring process.

■ Define key monitoring indicators derived from baseline survey. Provide a list ofmonitoring indicators that will be used for internal monitoring.

■ Describe institutional (including financial) arrangements.

■ Describe frequency of reporting and content for internal monitoring.

■ Describe process for integrating feedback from internal monitoring into imple-mentation.

■ Define methodology for external monitoring.

■ Define key indicators for external monitoring.

■ Describe frequency of reporting and content for external monitoring.

■ Describe process for integrating feedback from external monitoring into imple-mentation.

■ Describe arrangements for final external evaluation.


Costs and Budgets■ Provide a clear statement of financial responsibility and authority.

■ List the sources of funds for resettlement and describe the flow of funds.

■ Ensure that the budget for resettlement is sufficient and included in the overallproject budget.

■ Identify resettlement costs, if any, to be funded by the government and themechanisms that will be established to ensure coordination of disbursementswith the RAP and the project schedule.

■ Prepare an estimated budget, by cost and by item, for all resettlement costsincluding planning and implementation, management and administration, mon-itoring and evaluation, and contingencies.

■ Describe the specific mechanisms to adjust cost estimates and compensationpayments for inflation and currency fluctuations.

■ Describe the provisions to account for physical and price contingencies.

■ Describe the financial arrangements for external monitoring and evaluationincluding the process for awarding and maintenance of contracts for the entireduration of resettlement.

Annexes■ Copies of census and survey instruments, interview formats, and any other

research tools

■ Information on all public consultation including announcements and schedulesof public meetings, meeting minutes, and lists of attendees.

■ Examples of formats to be used in monitoring and reporting on RAP implemen-tation.


AdditionalResources


Additional ResourcesBlumer, M., and D. P. Warwick, eds. 1993. Social Research in DevelopingCountries. London: University College London Press Limited.

Cernea, M. 2000. “Risks, Safeguards, and Reconstruction: A Model forPopulation Displacement and Resettlement,” in M. Cernea and C. McDowell,eds. Risk and Reconstruction: Experience of Resettlers and Refugees.Washington, D.C.: The World Bank.

Davidson, F., and others. 1993. Relocation and Resettlement Manual: AGuide to Managing and Planning Relocation. Rotterdam: Institute for Housing andUrban Development Studies.

Grosh, M. E., and P. Glewwe, eds. 2000. Designing Household Survey Questionnairesfor Developing Countries. Washington, D.C.: The World Bank and Oxford UniversityPress.

International Finance Corporation. 1998. Doing Better Business through Effective PublicConsultation and Disclosure: A Good Practice Manual.

International Finance Corporation. 2000. Investing in People: Sustaining Communitiesthrough Improved Business Practice—A Community Development Resource Guide forCompanies.

The World Bank. 2000. Resettlement and Rehabilitation Guidebook (CD ROM).Washington, DC: The World Bank.

World Commission on Dams. 2000, Dams and Development: A New Framework forDecision-Making. London: Earthscan Publications, Ltd.


AnnexesAnnex A—Operational Directive OD 4.30 on Involuntary Resettlement


THE WORLD BANK OPERATIONAL MANUAL June 1 1990OD 4.30

Operational Directive Page 1 of 9

Involuntary Resettlement

Introduction

1. This directive describes Bank1 policy and

procedures on involuntary resettlement, as well as the

conditions that borrowers are expected to meet in

operations involving involuntary resettlement.2

Planning and financing resettlement components or

free-standing projects are an integral part of

preparation for projects that cause involuntary

displacement. Any operation that involves land

acquisition or is screened as a Category A or B

project for environmental assessment purposes3

should be reviewed for potential resettlement

requirements early in the project cycle (para. 20).

2. Development projects that displace people

involuntarily4 generally give rise to severe economic,

social, and environmental problems: production

systems are dismantled; productive assets and income

sources are lost; people are relocated to environments

where their productive skills may be less applicable

and the competition for resources greater; community

structures and social networks are weakened; kin

groups are dispersed; and cultural identity, traditional

1"Bank" includes IDA, and "loans" includes credits.

2See also Involuntary R esettlement in Development

Projects , World Bank Technical Paper No. 80

(Washington, D.C.: The World Bank, 1988).3OD 4.00, Annex A, Environmental Assessment ,

para. 18.4Such projects may include construction or

establishment of (a) dams, (b) new towns or

ports, (c) housing and urban infrastructure, (d)

mines, (e) large industrial plants, (f) railways or

highways, (g) irrigation canals, and (h) national

parks or protected areas. Refugees from natural

disasters, war, or civil strife are also involuntary

resettlers, but they are not discussed in this

directive (see OD 8.50, Emergency Recovery

Assistance ).

authority, and the potential for mutual help are

diminished. Involuntary resettlement may cause

severe long-term hardship, impoverishment, and

environmental damage unless appropriate measures

are carefully planned and carried out.5

Policy Objectives

3. The objective of the Bank's resettlement policy

is to ensure that the population displaced by a project

receives benefits from it. Involuntary resettlement is

an integral part of project design and should be dealt

with from the earliest stages of project preparation

(para. 28), taking into account the following policy

considerations:

(a) Involuntary resettlement should be avoided

or minimized where feasible, exploring all

viable alternative project designs. For

example, realignment of roads or

reductions in dam height may

significantly reduce resettlement needs.

(b) Where displacement is unavoidable,

resettlement plans should be developed.

All involuntary resettlement should be

conceived and executed as development

programs , with resettlers provided

sufficient investment resources and

opportunities to share in project benefits .

Displaced persons should be (i)

compensated for their losses at full

replacement cost prior to the actual move;

(ii) assisted with the move and supported

during the transition period in the

resettlement site; and (iii) assisted in their

efforts to improve their former living

standards, income earning capacity, and

5OD 4.00, Annex A, Environmental Assessment ,

para. 2, and Annex A3.




production levels, or at least to restore

them. Particular attention should be paid

to the needs of the poorest groups to be

resettled.

(c) Community participation in planning and

implementing resettlement should be

encouraged. Appropriate patterns of social

organization should be established, and

existing social and cultural institutions of

resettlers and their hosts6 should be

supported and used to the greatest extent

possible.

(d) Resettlers should be integrated socially

and economically into host communities

so that adverse impacts on host

communities are minimized. The best way

of achieving this integration is for

resettlement to be planned in areas

benefiting from the project and through

consultation with the future hosts.

(e) Land, housing, infrastructure, and other

compensation should be provided to the

adversely affected population, indigenous

groups,7 ethnic minorities, and

pastoralists who may have usufruct or

customary rights to the land or other

resources taken for the project. The

absence of legal title to land by such

groups should not be a bar to

compensation.

Resettlement Planning

4. Where large-scale8 population displacement is

6Host communities are those receiving resettlers.

7See OMS 2.34, Tribal People in Bank-Fin anced

Projects , to be reissued as OD 4.40, Tribal

People .8Where only a few people (e.g., less than 100-200

individuals) are to be relocated, appropriate

compensation for assets, logistical support for

unavoidable, a detailed resettlement plan, timetable,

and budget are required. Resettlement plans should

be built around a development strategy and package

aimed at improving or at least restoring the economic

base for those relocated. Experience indicates that

cash compensation alone is normally inadequate.

Voluntary settlement may form part of a resettlement

plan, provided measures to address the special

circumstances of involuntary resettlers are included.

Preference should be given to land-based resettlement

strategies for people dislocated from agricultural

settings. If suitable land is unavailable, nonland-

based strategies built around opportunities for

employment or self-employment may be used.

Plan Content

5. The content and level of detail of resettlement

plans, which will vary with circumstances, especially

the magnitude of resettlement, it should normally

include a statement of objectives and policies, an

executive summary, and detailed provision for the

following:

(a) organizational responsibilities (para. 6);

(b) community participation and integration

with host populations (paras. 7-10);

(c) socioeconomic survey (para. 11);

(d) legal framework (para. 12);

(e) alternative sites and selection (para. 13);

(f) valuation of and compensation for lost

assets (paras. 14-16);

(g) land tenure, acquisition, and transfer (para.

17);

moving, and a relocation grant may be the only

requirements. However, the principles on which

compensation is to be based are the same as for

larger groups.




(h) access to training, employment, and credit

(para. 18);

(i) shelter, infrastructure, and social services

(para. 19);

(j) environmental protection and management

(para. 20); and

(k) implementation schedule, monitoring, and

evaluation (paras. 21-22).

Cost estimates should be prepared for these activities,

and they should be budgeted and scheduled in

coordination with the physical works of the main

investment project.

Organizational Responsibilities

6. The responsibility for resettlement rests with the

borrower. The organizational framework for managing

resettlement must be developed during preparation

and adequate resources provided to the responsible

institutions. The organization responsible for

resettlement should be strengthened when entities

executing infrastructure or other sector-specific

projects lack the experience and outlook needed to

design and implement resettlement. One alternative is

to create a special resettlement unit within the project

entity: this can facilitate the involvement of other

line agencies. Another is to entrust resettlement to

the regional or town administration that knows the

population and area, can mobilize local expertise,

speaks the resettlers' language, and will ultimately be

responsible for the integration of resettlers into the

host population and area. There also may be

considerable scope for involving nongovernmental

organizations (NGOs) in planning, implementing,

and monitoring resettlement.9

Community Participation and Integration with Host

Population

9See OD 14.70, Involving Nongovernmental

Organizations in Bank-Supported Activities .

7. Most displaced people prefer to move as part of

a preexisting community, neighborhood, or kinship

group. The acceptability of a resettlement plan can be

increased and the disruption caused by resettlement

can be cushioned by moving people in groups,

reducing dispersion, sustaining existing patterns of

group organization, and retaining access to cultural

property10

(temples, pilgrimage centers, etc.), if

necessary, through the relocation of the property.

8. The involvement of involuntary resettlers and

hosts in planning prior to the move is critical. Initial

resistance to the idea of involuntary resettlement is to

be expected. To obtain cooperation, participation, and

feedback, the affected hosts and resettlers need to be

systematically informed and consulted during

preparation of the resettlement plan about their

options and rights. They should also be able to

choose from a number of acceptable resettlement

alternatives. These steps can be taken directly or

through formal and informal leaders and

representatives. Experience has shown that local

NGOs can often provide valuable assistance and

ensure viable community participation. Moreover,

institutionalized arrangements, such as regular

meetings between project officials and communities,

should be provided for resettlers and hosts to

communicate their concerns about the resettlement

program to project staff throughout planning and

implementation.11

Particular attention must be given

10

See OPN 11.03, Management of Cultural Property

in Bank-Financed Pro jects , to be reissued as OD

4.50, Cultural Property .11

Disputes of varying kinds may arise in the

process of implementation of the agreed

resettlement plan. These conflicts could take the

form of appeals related to the compensation

payable to affected persons, conflicts between the

displaced persons and the host population, appeals

to the agency charged with the implementation of

the resettlement with regard to services promised,

etc. It is therefore important to devise schemes for

conflict resolution for all resettlement plans. Such




to ensure that vulnerable groups such as indigenous

people, ethnic minorities, the landless, and women

are represented adequately in such arrangements.

9. The plan should address and mitigate

resettlement's impact on host populations. Host

communities and local governments should be

informed and consulted. Any payment due the hosts

for land or other assets provided to resettlers should

be promptly rendered. Conflicts between hosts and

resettlers may develop as increased demands are

placed on land, water, forests, services, etc., or if the

resettlers are provided services and housing superior

to that of the hosts. Conditions and services in host

communities should improve, or at least not

deteriorate. Providing improved education, water,

health, and production services to both groups fosters

a better social climate for their integration. In the

long run, the extra investment will help prevent

conflicts and secure the project's aims.

10. Successful resettlement requires a timely transfer

of responsibility from settlement agencies to the

settlers themselves. Otherwise, a dependency

relationship may arise, and agency resources may

become tied up in a limited number of continually

supervised schemes. Local leadership must be

encouraged to assume responsibility for

environmental management and infrastructure

maintenance.

Socioeconomic Survey

11. Resettlement plans should be based on recent

information about the scale and impact of

resettlement on the displaced population. In addition

to describing standard household characteristics,

socioeconomic surveys should describe (a) the

magnitude of displacement; (b) information on the

full resource base of the affected population,

including income derived from informal sector and

schemes should, as far as possible, take into

account existing procedures for settling disputes in

the country or area concerned.

nonfarm activities, and from common property; (c)

the extent to which groups will experience total or

partial loss of assets; (d) public infrastructure and

social services that will be affected; (e) formal and

informal institutions (such as community

organizations, ritual groups, etc.) that can assist with

designing and implementing the resettlement

programs; and (f) attitudes on resettlement options.

Socioeconomic surveys, recording the names of

affected families, should be conducted as early as

possible to prevent inflows of population ineligible

for compensation.

Legal Framework

12. A clear understanding of the legal issues

involved in resettlement is needed to design a

feasible resettlement plan. An analysis should be

made to determine the nature of the legal framework

for the resettlement envisaged, including (a) the scope

of the power of eminent domain, the nature of

compensation associated with it, both in terms of the

valuation methodology and the timing of payment;

(b) the legal and administrative procedures applicable,

including the appeals process and the normal time

frame for such procedures; (c) land titling and

registration procedures; and (d) laws and regulations

relating to the agencies responsible for implementing

resettlement and those related to land compensation,

consolidation, land use, environment, water use, and

social welfare.

Alternative Sites and Selection

13. The identification of several possible relocation

sites and the demarcation of selected sites is a critical

step for both rural and urban resettlement. For land-

based resettlement, the new site's productive potential

and locational advantages should be at least

equivalent to those of the old site. The Bank

encourages "land for land" approaches, providing

replacement land at least equivalent to the lost land.

For rural settlers, irrigation, land reclamation, tree

crop development, intensification of production, and

other innovations often can provide adequate




production potential on limited amounts of land to

resettle agriculturalists, even in countries with high

population densities. In selecting sites, attention

must be paid to the availability of sources of off-farm

income (fishing, gathering forest products, seasonal

wage employment) to complement farm income. For

urban resettlers, the new site should ensure

comparable access to employment, infrastructure,

services, and production opportunities. For both rural

and urban resettlement, the borrower needs to (a)

develop institutional and technical arrangements for

identifying and preparing relocation sites, e.g.,

pooling together small plots, wasteland reclamation,

land leveling, and terracing; (b) draw up timetables

and budgets for site preparation and transfer; (c) make

legal arrangements for transferring titles to resettlers;

and (d) consider, when necessary, a temporary freeze

on land transactions within the relocation area to

prevent land speculation. Though the Bank does not

normally disburse against land acquisition, it can

finance land improvement to accommodate resettlers.

Valuation of and Compensation for Lost Assets

14. Valuation of lost assets should be made at their

replacement cost. Compensation is facilitated by (a)

paying special attention to the adequacy of the legal

arrangements concerning land title, registration, and

site occupation; (b) publicizing among people to be

displaced the laws and regulations on valuation and

compensation; (c) establishing criteria for

determining the resettlement eligibility of affected

households, e.g., households that have only partially

lost their assets but are no longer economically viable

should be entitled to full resettlement; and

(d) developing mechanisms to prevent illegal

encroachers and squatters, including an influx of

nonresidents entering to take advantage of such

benefits, from participating in the compensation

arrangements, by an early recording of the numbers

and names of affected populations entitled to

compensation/rehabilitation.

15. Some types of loss, such as access to (a) public

services; (b) customers and suppliers; and (c) fishing,

grazing, or forest areas, cannot easily be evaluated or

compensated for in monetary terms. Attempts must

therefore be made to establish access to equivalent

and culturally acceptable resources and earning

opportunities.

16. Vulnerable groups at particular risk are

indigenous people, the landless and semi-landless,

and households headed by females who, though

displaced, may not be protected through national land

compensation legislation. The resettlement plan must

include land allocation or culturally acceptable

alternative income-earning strategies to protect the

livelihood of these people.

Land Tenure, Acquisition, and Transfer

17. Resettlement plans should review the main land

tenure and transfer systems, including common

property and nontitle-based usufruct systems

governed by locally recognized land allocation

mechanisms. The objective is to treat customary and

formal rights as equally as possible in devising

compensation rules and procedures. The plan should

address the issues raised by the different tenure

systems found in a project area, including (a) the

compensation eligibility of land-dependent

populations; (b) the valuation procedures applicable

to different tenure types; and (c) the grievance

procedures available for disputes over land

acquisition. Plans should contain provisions for

conducting land surveys and regularizing land tenure

in the earliest stages of project development.

Planning should also anticipate the approximate time

needed to acquire and transfer land.

Access to Training, Employment, and Credit

18. Normally, general economic growth cannot be

relied upon to protect the welfare of the project-

affected population. Thus, alternative employment

strategies are needed for nonagricultural displaced

people, or where the land that can be made available

is not sufficient to accommodate all the displaced

farmers. The resettlement plan should, where feasible,

exploit new economic activities made possible by the




main investment requiring the displacement.

Vocational training, employment counseling,

transportation to jobs, employment in the main

investment project or in resettlement activities,

establishment of industries, incentives for firms to

locate in the area, credit and extension for small

businesses or reservoir aquaculture, and preference in

public sector employment should all be considered

where appropriate.

Shelter, Infrastructure, and Social Services

19. To ensure the economic and social viability of

the relocated communities, adequate resources should

be allocated to provide shelter, infrastructure (e.g.,

water supply, feeder roads), and social services (e.g.,

schools, health care centers).12

Site development,

engineering, and architectural designs should be

prepared for shelter, infrastructure, and social

services. Since community or self-built houses are

often better accepted and more tailored to the

resettlers' needs than contractor-built housing,

provision of a building site with suitable

infrastructure, model plans, building materials,

technical assistance, and "construction allowances"

(for income foregone while resettlers build their

houses) is an option communities should be offered.

Planning for shelter, infrastructure, and services

should take into account population growth.

Environmental Protection and Management

20. The screening process for an environmental

assessment (EA) normally classifies projects

involving involuntary resettlement as Category A.13

The EA of the main investment requiring the

resettlement should thus cover the potential

environmental impacts of the resettlement. The

resettlement plan must be developed in coordination

with the EA and define the boundaries of the

12

Health care services, particularly for pregnant

women, infants, and the elderly, may be

important during and after relocation to prevent

increases in morbidity and mortality due to

malnutrition, the stress of being uprooted, and

the usually increased risk of water-borne diseases.13

See OD 4.00, Annex A, Environmental Assessment ,

and Annex B, Environmental Policy for Dam and

Reservoir Projects . The environmental

implications of involuntary resettlement will be

further discussed under para 6.0, "Special Issues

in Environmental Assessment," in Environmental

Assessment Sourcebook , (Washington, D.C.:

The World Bank, to be issued).




relocation area, and calculate incremental population

density per land unit. In agricultural projects

(involving, for example, relocation to the catchment

surrounding a reservoir, or to a downstream

command area), if the incoming resettled population

is large in relation to the host population, such

environmental issues as deforestation, overgrazing,

soil erosion, sanitation, and pollution are likely to

become serious and plans should either include

appropriate mitigating measures, including training

of oustees, or else should allow for alternative sites

to be selected. Urban resettlement raises other

density-related issues (e.g., transportation capacity,

access to potable water, sanitation systems, health

facilities, etc.). Constructive environmental

management, provided through the EA's mitigation

plan,14

may provide good opportunities and benefits

to resettlers and host populations alike (e.g., project-

financed compensatory afforestation not only replaces

the forests submerged by reservoirs but also offers

gainful employment). If the likely consequences on

the environment are unacceptable, alternative and/or

additional relocation sites must be found.

Implementation Schedule, Monitoring, and

Evaluation

21. The timing of resettlement should be

coordinated with the implementation of the main

investment component of the project requiring the

resettlement. All resettlement plans should include an

implementation schedule for each activity covering

initial baseline and preparation, actual relocation, and

post-relocation economic and social activities. The

plan should include a target date when the expected

benefits to resettlers and hosts would be achieved.

22. Arrangements for monitoring implementation of

resettlement and evaluating its impact should be

developed by the borrower during project preparation

and used during supervision.15

Monitoring provides

14

See Annex A1, para. 2, in OD 4.00, Annex A,

Environmental Assessment .15

See OD 10.70, Project Monitoring and Evaluation .

both a warning system for project managers and a

channel for the resettlers to make known their needs

and their reactions to resettlement execution.

Monitoring and evaluation units should be

adequately funded and staffed by specialists in

resettlement. In-house monitoring by the

implementing agency may need to be supplemented

by independent monitors to ensure complete and

objective information. Annual and midterm reviews

are desirable for large-scale resettlement. The

borrower should be required to continue impact

evaluation for a reasonable period after all

resettlement and related development activities have

been completed. The borrower should also be

required to inform the Bank about the findings.

Bank Role and Project Options

23. The Bank supports borrowers' efforts through (a)

assistance in designing and assessing resettlement

policy, strategies, laws, regulations, and specific

plans; (b) financing technical assistance to strengthen

the capacity of agencies responsible for resettlement;

and (c) direct financing of the investment costs of

resettlement. The Bank may sometimes finance

resettlement even though it has not financed the main

investment that made displacement and resettlement

necessary (para. 26).

24. The task manager (TM) should inform the

borrower of the Bank's resettlement policy. Starting

early in the project cycle, the TM with the support of

Bank operational, research, and legal staff should

assess government policies, experiences, institutions,

and the legal framework covering resettlement. In

particular, the TM needs to ensure that involuntary

resettlement is avoided or minimized, that laws and

regulations concerning displaced people provide

compensation sufficient to replace all lost assets, and

that displaced persons are assisted to improve, or at

least restore, their former living standards, income

earning capacity, and production levels.

25. The adequacy of the resettlement plan should be

reviewed by appropriate social, technical, and legal

experts. Resettlement specialists should visit the




possible resettlement sites and review their

suitability. In the case of large-scale relocation, such

experts should be included in independent technical

or environmental review boards.16

26. Bank financing of resettlement can be provided

as follows: (a) As a component of the main

investment project causing displacement and

requiring resettlement. (b) If large enough, as a free-

standing resettlement project with appropriate cross-

conditionalities, processed and implemented in

parallel with the investment project that causes the

displacement. The latter may better focus country and

Bank attention on the effective resolution of

resettlement issues. (c) As a sector investment loan.17

Where the specific resettlement needs of each

subproject are not known in advance, the borrower

would need to agree to resettlement policies,

planning principles, institutional arrangements, and

design criteria that meet Bank policy and

requirements as a condition of the loan. An estimate

should be provided of total population to be

displaced and overall resettlement costs, as well as an

evaluation of proposed resettlement sites. Subprojects

in sector investment loans should be screened by the

implementing agency to ensure consistency with this

directive, and approved individually by the Bank.

For countries with a series of operations requiring

resettlement, efforts to improve the policy,

institutional, and legal framework for resettlement

should form part of the Bank's ongoing country and

sector dialogue with the government. These efforts

should be appropriately reflected in economic and

sector work and in country strategy papers and briefs.

Processing and Documentation

27. The Regional Vice President (RVP) should be

kept informed of major resettlement issues, and his

16

See OD 4.00, Annex B, Environmental Policy for

Dam and Reservoir Projects .17

See OD 1.00, Bank Goals and Instrum ents , and OD

8.20, Sector Investment and Maintenance Loans ,

both to be issued.

guidance sought where necessary. The Regional

Environment Division (RED), the Legal Department

(LEG), and settlement specialists in Sector Policy

and Research (PRS) should be consulted or included

as necessary in peer reviews on involuntary

resettlement issues throughout the project cycle.

Identification

28. The possibility of involuntary resettlement

should be determined as early as possible and

described in all project documents. The TM should

(a) briefly summarize in the Initial Executive Project

Summary (Initial EPS)18

the magnitude, strategy,

and timing of the resettlement; (b) inform borrowers

of the Bank's resettlement policy; (c) review past

borrower experience with similar operations; (d)

invite agencies responsible for resettlement to discuss

their policies, plans, and institutional, consultative,

and legal arrangements for resettlement; and (e) where

appropriate, ensure that technical assistance is

provided early to borrowers. Such assistance should

include the use of project preparation facility (PPF)

resources19

for planning resettlement and building

institutional capacity.

Preparation

29. During project preparation, the feasibility of

resettlement must be established, a strategy agreed

upon, the resettlement plan drafted, and budget

estimates prepared.20

The full costs of resettlement

18

See Circular Op 87/03, Procedures for Processing

Investment Loans and Credits , filed as OMS

2.00, to be reissued as OD 9.00, Processing and

Documentation for Investment Lending .19

See OMS 2.15, Project Preparation Facility , to be

reissued as OD 8.00, Project Preparation Facility

and Special Project Preparation Facility .20

Detailed guidelines for preparing and appraising

resettlement plans are provided in Involuntary

Resettlement i n Development Projects , World

Bank Technical Paper No. 80, Annex 1

(Washington, D.C.: The World Bank, 1988). Pro




should be identified and included in the total cost of

the main investment project, regardless of financing

source. The costs of resettlement should also be

treated as a charge against the economic benefits of

the investment project that causes the relocation. Any

net benefits to resettlers (as compared to the "without

project" circumstances) should be added to the benefit

stream of the main investment. While the

resettlement component or free-standing project need

not be economically viable on its own, it should be

the least cost approach consistent with the policies

laid out above.

Appraisal and Negotiation

30. Submission to the Bank of a time-bound

resettlement plan and budget that conforms to Bank

policy is a condition of initiating appraisal for

projects involving resettlement, except for sector

investment loans as discussed in para. 26. All final

EPSs should confirm that this requirement has been

met. The appraisal mission should ascertain (a) the

extent that involuntary resettlement and human

hardship will be minimized and whether borrowers

can manage the process; (b) the adequacy of the plan,

including the timetable and budget for resettlement

and compensation; (c) the soundness of the economic

and financial analysis; (d) the availability and

adequacy of sites and funding for all resettlement

activities; (e) the feasibility of the implementation

arrangements; and (f) the extent of involvement of

beneficiaries. At negotiations, the borrower and the

Bank should agree on the resettlement plan. The

resettlement plan and the borrower's obligation to

carry it out should be reflected in the legal

documents. Other necessary resettlement-related

actions must be covenanted. The Staff Appraisal

Report and the Memorandum and Recommendation

of the President should summarize the plan and state

that it meets Bank policy requirements.

Implementation and Supervision

forma cost tables and guidelines for economic and

financial analysis are provided in Annex 2.

31. Resettlement components should be supervised

throughout implementation.21

Supervision that is

sporadic or left until late in implementation

invariably jeopardizes the success of resettlement.

Bank supervision missions should be staffed with the

requisite social, economic, and technical expertise.

Annual reviews of large-scale resettlement and in-

depth Bank reviews of midterm progress are highly

desirable. These reviews should be planned from the

outset to allow the Bank and the borrower to make

necessary adjustments in project implementation.

Complete recovery from resettlement can be

protracted and can often make it necessary to continue

Bank supervision until well after populations have

been relocated, sometimes even after a project has

been closed.

Ex Post Evaluation

32. The project completion report22

submitted to the

Operations Evaluation Department should evaluate

resettlement and its impact on the standards of living

of the resettlers and the host population.

21

See OD 13.05, Project Supervision , particularly

paras. 44-47.22

See the OPNSV memorandum, Guidelines for

Preparing Project Completion Reports , June 7,

1989, and OMS 3.58, General Guidelines for

Preparing Project Completion Reports , which are

to be combined and reissued as OD 13.55,

Project Completion Rep orts .


Annex B—Sample Terms of Reference (TOR) for a Resettlement Action Plan

A good TOR should provide potential bidders with sufficient information to enable themto make a detailed proposal for planning and implementing resettlement associated witha given project. At the same time, the TOR should not be too proscriptive. Rather, itshould allow potential bidders flexibility in the application of IFC policy to the local con-text, conditions and requirements—as identified through public consultation—of thepeople to be affected by the project. The following is a sample TOR for an infrastructureproject involving both physical and economic displacement.

Terms of Reference

1. Saharan Roads International Corporation (SRIC) has signed an agreement with thegovernment of the Republic of the Sahel for the construction and operation of a tollbridge to span the Agades River at Iferouane, the capital city situated, on the east bank.The bridge will reduce severe traffic congestion and contribute to economic develop-ment of this burgeoning city. Construction is planned to commence in July 2002. Theproject footprint will affect a regional marketplace, which includes about 300 vendors’stalls and a large livestock market on the west bank. A fishing community located on thewest bank will be resettled, possibly to a new site in open land about 1,000 metersupstream. On the more urbanized east bank, an estimated 200–250 households and anunspecified number of small businesses will be resettled to make way for constructionof abutments, widening of the approach road, and lay-down areas for constructionequipment and materials.

2. The government of the Republic of the Sahel is responsible for resettlement of peoplein, “instances of land acquisition for reasons of public utility” (Decree 1999/034). TheOffice of Habitat and Cadastral Services (OHCS) of the Ministry of Land, NaturalResources, and Human Settlements is charged with monitoring and oversight of reset-tlement in the country.

3. Financing for this project is provided in part by the International Finance Corporation(IFC), a member of the World Bank Group. SRIC requires the expert services of a con-sultant resettlement team to prepare a resettlement action plan that fully meetsIFC/World Bank Group policy criteria, (specifically OD 4.30 on InvoluntaryResettlement).

4. The project will finance the resettlement and related community development sub-projects intended to improve the economy and well-being of affected people. The reset-tlement team will work in close collaboration with specialists from the OHCS.Resettlement and community development planning and implementation will be super-vised by a resettlement task force (RTF) comprising representatives of the Municipality ofIferouane, the Ministry of Land, Natural Resources, and Human Settlements, the Ministryof the Interior, and senior project personnel from SRIC.


The team will design the resettlement and development components in accordance withthe procedures outlined in the “IFC Handbook for Preparing a Resettlement Action Plan”in consultation with local stakeholders and in close collaboration with the OHCS. Theteam will also assist OHCS with implementation and annual monitoring of the resettle-ment action plan and community development components. A final external evaluationof the RAP and community development components will be carried out by an inde-pendent third party to be engaged by the RTF.

6. The team will include experts with demonstrated expertise in the following areas:

■ A socioeconomist with experience in World Bank Group resettlement projectsand a background in design, implementation, and/or monitoring and evaluationof capital development projects in developing countries.

■ A land-use planner/natural resources economist to assist the socioeconomistwith design, implementation, and analysis of studies needed for socioeconomicdevelopment as well as logistical requirements for resettlement to new areas.

■ A pubic consultation expert with skills in community facilitation, conflict reso-lution, and communications.

One team member, preferably the socioeconomist or land-use economist, will serve asteam leader reporting to the SRIC project manager and the resettlement task force.

7. The team will identify local expertise needed to assist the planning, implementation,and monitoring and evaluation of the resettlement and community development com-ponents. This will include data acquisition tasks for baseline surveys, use of naturalresources (fisheries, agriculture, and livestock), and other studies needed to design andmonitor the components. The services of an established local NGO will be required toassist with implementation and monitoring of both components.

8. Interested parties should submit proposals by March 31, 2001. Proposals shouldinclude an overview of the technical approach and organizational arrangements as wellas resumes of key expatriate personnel, local expertise requirements, a budget, and anestimated timetable. SRIC plans to establish construction camps in July 2002, with com-mencement of civil works (approach road and abutments on the west bank) inSeptember 2002. The RAP component (physical relocation of people) is to be complet-ed by June 2002. Community development activities are expected to reach completionwith a final external evaluation in mid-2005.


Annex C—Sample Budget for a Resettlement Action Plan

Photo Credits

Pageiii Gavin Murray, CES Director, David Hills Photographyv Village between transmission towers, Cote d'Ivoire, Eric Brusberg

vii Boats on Lake Victoria, Tanzania, Eric Brusberg ix Village electric meters, Philippines, Eric Brusberg xi Resettlement, World Bank 1 Erection of temporary housing in new agricultural areas, Beluluane,

Mozambique, Richard English 5 Roadwork in Northern Cameroon, Eric Brusberg 6 Bayano hydroelectric dam, Panama, Eric Brusberg 7 Consultation with affected people, Uganda, Eric Brusberg 8 Gold mine, Ghana, Eric Brusberg

11 Community consultation, Cameroon, Eric Brusberg 12 Demolition of houses, Panama, Jose Zevallos 15 Indigenous people, Panama, Eric Brusberg 26 Demarcation of areas requiring population resettlement, Philippines,

Jose Zevallos 28 Villager in front of new house, Mozambique, Eric Brusberg 34 Resettlers building new houses, Cote d'Ivoire, Eric Brusberg 38 New resettlement, El Salvador, Eric Brusberg 39 Petroglyph, Panama, Eric Brusberg 41 Site appraisal, Mali, Ted Pollett45 Public consultation, Bolivia, Patty Miller 48 Public consultation, Cameroon, Eric Brusberg 49 Public consultation, Cameroon, Eric Brusberg 55 Participatory Rural Appraisal, Mali, Ted Pollett59 New settlement in Luzon, Philippines, Eric Brusberg 65 Workover rig, Venezuela, Patty Miller

IFC Project Managers and Authors: Richard English, Frederick E. Brusberg Editor: Deborah Styles Design: Henry Rosenbohm Cover and Divider Painting: Susan T. Wood Printing: Automated Graphic Systems

©2002 The International Finance Corporation (IFC)

2121 Pennsylvania Avenue, NW Washington, DC, 20433 USA

All rights reserved

First printing April 2002

This manual has been prepared by the staff of the International Finance Corporation (IFC). The judgementsexpressed do not necessarily reflect the views of IFC’s Board of Directors or the governments they represent.

ISBN 0-8213-5153-2

INTERNATIONAL FINANCE CORPORATIONA Member of the World Bank Group

2121 Pennsylvania Avenue, NWWashington, DC 20433 USA

For more information about the IFCEnvironment and Social Development Department

please call the Washington DC office at (202) 473-6770or visit IFC’s website at: www.ifc.org

ISBN: 0-8213-5153-2

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